News Releases

Druzhba Pipeline

No. 2/07
January 9, 2007

EU MEETS ON OIL SUPPLY DISRUPTIONS

SEE UPDATED INFORMATION HERE.

The European Union Commission convened today a meeting of its Oil Supply Group to analyze the impact of the recent cuts in oil supplies from Russia via Belarus and to possibly explore measures in the case of any shortage of oil products.

"It is unacceptable that energy suppliers or transit countries do not inform their counterparts about decisions that may affect their supplies," said EU Energy Commissioner Andris Piebalgs. "We call upon the two Parties involved to rapidly find a mutually acceptable solution to the current situation and to restore oil supplies to the European Union immediately. It is also important to ensure that ways are found to avoid this kind of disruption to energy supplies occurring again."

Unresolved issues between Russia and Belarus resulted in recent days in repeated and prolonged disruptions of crude oil deliveries from Russia via Belarus through the Druzhba pipeline. Since Monday, several EU Member States have reported a complete cut in flows lasting until now. Crude processing in Germany, Poland, Hungary, Slovakia and the Czech Republic has been affected and refineries relying on deliveries through the Druzhba pipeline started drawing on their operational stocks. EU Member States affected report having sufficient emergency stocks at their disposal for the time being to assure uninterrupted operation of their refining and distribution systems.

Emergency oil stocks of crude and petroleum products, maintained in the Union in accordance with EU legislation for these occasions, stand at present at over 120 days of EU average consumption.

The Oil Supply Group is set up by the applicable EU legislation dealing with measures to mitigate the effects of difficulties in the supply of crude oil and petroleum products and all Members States are members of the Group. The Thursday meeting will be devoted to necessary consultations to ensure coordination of the possible releases of stocks and other measures taken as necessary in the face of the current situation.

Although the available oil stocks and the coordination mechanisms in place guarantee no disruption of supply of petroleum products to consumers in the EU, the situation stemming from the ongoing dispute between Russia and Belarus has to be taken seriously. The European Commission is in continuous contact with the Russian and Belarus authorities to monitor the situation. The necessity for the EU to draw on its emergency stocks represents non-negligible financial costs to the Union. It also reflects negatively on the image of the reliability of the two countries as energy partners for the Union.

Moreover, the recent developments confirm again that Europe needs to act to limit its external vulnerability to imported hydrocarbons and enhance its overall security of energy supply. This will be one of the main objectives, along with combating climate change and promoting jobs and growth, of the forthcoming Strategic Energy Review that will outline the elements of a new European Energy Policy.

The Druzhba pipeline supplies 1.8 million barrels per day to Poland and Germany through Belarus. Some 30% of the EU oil imports or 25% of consumption comes from Russia, and over 50% of these cross Belarus. Both the Northern and Southern Druzhba pipeline systems cross Belarus, with the latter also crossing Ukraine.

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