The Polish authorities have asked the European Union to take action on the Russian Druzhba pipeline, through the southern branch of which Hungary, Slovakia and the Czech Republic still receive oil. Poland insists that its intention to refuse supplies via the northern branch of Druzhba puts local oil refineries in an unequal position with competitors, primarily from Hungary, therefore, together with Germany, Poland wants to initiate a change in the tariff policy for Russian supplies, which will equalize in conditions Polish and Hungarian companies. Bloomberg writes about this, citing a report by the Polish climate ministry.
Germany and Poland announced in the summer that they were ready to abandon pipeline oil from Russia, which they received through the northern branch of the Druzhba oil pipeline, both countries decided to take this step as a sign of solidarity with Ukraine. The authorities also wanted to reduce Moscow's income from oil supplies in this way, but these intentions were not legally recorded. Now, on the eve of the deadline, Poland is asking the European Union to formalize sanctions against the Druzhba oil pipeline – this will allow the authorities to terminate all contracts with Russia on the basis of the force majeure clause and avoid penalties.
“In our opinion, the introduction of further sanctions, including against the northern branch of the Druzhba oil pipeline, requires appropriate rules at the EU level. Poland is cooperating with Germany on this issue,” the Polish ministry said in a statement.
Poland is also concerned about the prospects for energy company PKN Orlen, which risks losing its position due to unfair competition in the region with the Hungarian company MOL, which will continue to receive cheap Russian oil through the Druzhba pipeline. The Polish agency believes that the EU needs to level the playing field between European companies through a "level playing field" for pipeline Russian oil.
Moreover, Russian oil to Poland has already been replaced by suppliers from Saudi Arabia and Norway, at the moment the level of dependence on Russian oil is estimated at 30%. Poland has already abandoned sea supplies and now wants to abandon pipelines, but this requires EU assistance. The German authorities, as the agency notes, are also waiting for progress on this issue from the EU, since local authorities are regularly criticized for the decision to voluntarily abandon oil through Druzhba. Last year, Russia supplied about 720,000 barrels per day via Druzhba, most of which was sent to Poland and Germany.
The absence of a reaction from the European Union will allow Poland and Germany to continue buying Russian oil through Druzhba, the agency notes, despite the promises made in the summer. Poland's Orlen had previously even requested the opportunity to replenish its storage facilities with oil from Druzhba in order to be able to maintain transit. The agency recalls that the introduction of sanctions against the northern branch of Friendship will require another unanimous vote at the level of country leaders, but the introduction of special tariffs that could equalize business conditions for Polish and Hungarian companies does not require unanimity.
Starting December 5, a cap price mechanism will come into effect with respect to offshore deliveries of Russian oil, according to which companies from countries that have joined the mechanism will not be able to buy Russian oil at prices above the established limit. These measures are expected to drastically cut Moscow's oil revenues, putting pressure on Russian authorities and making it harder to wage war against Ukraine. At the moment, the price ceiling is still being discussed, but it is expected at $65-70 per barrel.
