Oil flows on Druzhba pipeline suspended in parts of Eastern Europe

BUDAPEST/PRAGUE, Nov 15 (Reuters) – Oil supply to parts of Eastern and Central Europe via a section of the Druzhba pipeline has been temporarily suspended, according to oil pipeline operators in Hungary and Slovakia.

The extent of the disruption was not immediately clear, and came concurrent with an explosion in a village in eastern Poland near the Ukrainian border that raised alarm among NATO countries.

Hungary’s MOL (MOLB.BU) said its Ukrainian partner told the company that a Russian rocket hit a power station close to the Belarus border that provides electricity for a pump station, and this led to the stoppage. Slovakia’s Transpetrol confirmed the suspension as well, citing “technical reasons on the Ukrainian side” but did not specify a rocket strike.

The Druzhba pipeline network originates in Russia and splits in Belarus into Ukraine, where it splits again, supplying several countries in Eastern and Central Europe that depend on that oil, including refineries in landlocked Hungary, Slovakia and the Czech Republic.

“The reason for the suspension of supplies has not yet been officially confirmed by the Ukrainian side,” said Transpetrol in a statement, adding that it expects to have more information about the cause of the shutdown by Wednesday.

Czech pipeline operator MERO has not observed disruptions so far in the flow of oil through the Druzhba line, a spokeswoman said on Tuesday. Polish pipeline operator PERN said late on Tuesday that oil is flowing normally via the Polish section of the line.

Hungarian Prime Minister Viktor Orban convened a meeting of the defence council on Tuesday after Druzhba shipments were suspended, Orban’s press chief told state news agency MTI.

Russia’s state-owned pipeline monopoly Transneft (TRNF_p.MM) has been notified by Ukraine that the supply to Hungary was temporarily suspended, the RIA news agency quoted Transneft as saying.

Oil prices jumped on the news, with the Brent benchmark rising 0.8% on the day.

Reporting by Krisztina Than and Jan Lopatka; additional reporting by Marek Strzelecki in Warsaw; editing by David Gregorio

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