An interrupted friendship

After banning seaborne crude imports from Russia, the European Commission is now considering further restrictions on Russian supplies as part of a new package of sanctions, this time targeted at the Druzhba[1] pipeline (see Fig. 1).

Germany and Poland imported an average of around 480,000 b/d via Druzhba in 2022, while shipments via the pipeline’s southern leg averaged almost 290,000 b/d, a level that dipped very slightly this year. [2] Germany-bound piped Russian oil flows came to a complete halt after the country’s import ban took effect on 1 January 2023.[3] In February, Russia halted supplies to Poland over issues around transit fees and the absence of confirmed supply orders,[4] while two months later Poland’s Orlen terminated its last Russian oil contract.[5] At the same time, Russia is boosting its seaborne exports, which surged to a record 3.4 million b/d this March, with 1.8 million shipped to India and around 1 million to China[6] (see Fig. 2).

This May, Poland proposed formalizing the halt of piped Russian oil flows through the northern section of the Druzhba pipeline, while shipments via its southern route are set to continue, as last year the EU granted an exemption to the three landlocked countries – Hungary, Slovakia and the Czech Republic.

According to some analysts, Poland is keen on filling the niche to be left vacant by Russia. While imports originating from third countries, including Kazakhstan, are currently allowed via Druzhba, these may also be banned. In this case, with substantial volumes imported from Kazakhstan via the Gdansk terminal, Poland is poised to become a key supplier for Germany.[7] But Kazakhstan is also considering alternative export routes to Europe. Oil supplies from the Caspian Sea port of Aktau to Azerbaijan’s Baku jumped to 163,436 tonnes in Q1 2023, from 28,875 tonnes in the same period in 2022,[8] while Kazakhstan’s state transportation company, Kazmortransflot, said it had pumped an additional 104,000 tonnes via the Baku-Tbilisi-Ceyhan pipeline in January-March. And this is just for starters. Last month, it emerged that Kazakhstan and Azerbaijan were in talks to pipe 5 million tonnes of Kazakh crude oil via the Baku-Supsa pipeline this year, as Astana looks to ease its dependence on transit via Russia[9] amid rising risks.

It remains to be seen how the situation will unfold, but it’s already clear that new restrictions, if adopted, will hardly have a major impact.