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Russia cuts oil supply to Poland

| 2023-02-26 2 min read

Russia cuts oil supply to Poland

Reading Time: 2 minutes

Russia has ceased the supply of oil to Poland through the Druzhba pipeline, CEO of Polish oil refiner PKN Orlen Daniel Obajtek announced on Saturday, 25 February. 

The sudden suspension of oil supplies through the pipeline, which is exempt from EU anti-Russian sanctions, has the potential to impact Poland’s energy sector and economy. However Obajtek was confident regarding Poland’s ability to mitigate the effects of the disruption.  

“Russia has stopped oil supplies to Poland, for which we are fully prepared,” Obajtek tweeted. Citing Poland’s “recent diversification” he noted that only 10% of its oil now comes from Russia, “and we will replace that with oil from other sources”. 

Obajtek did not provide further details on how the oil supply would be maintained. “We will provide more information on oil supplies to Poland during Tuesday’s conference on development projects,” he wrote.

Russia silent on whether halt was retaliatory

The Druzhba pipeline, also known as the Friendship Pipeline or the Comecon Pipeline, is a major route for transporting crude oil from eastern Russia to several European countries. Today, it is the primary conduit for Russian and Kazakh oil transportation to Europe.

The pipeline, which supplies oil to Poland and Germany, as well as to Hungary, Czechia and Slovakia, was exempted from EU sanctions to help countries with limited options for alternative deliveries, UK daily The Guardian recalled.

Russian authorities had not commented on the matter by Sunday afternoon, and the reasoning behind the halt remains unclear. Observers noted that the supply halt through the pipeline occurred the day after Poland delivered its first Leopard tanks to Ukraine.

Norway’s Oil Fund chides Orlen over human rights

Earlier in the week, on Wednesday 22 February, Norway’s Government Pension Fund Global, or Oil Fund, expressed concerns over Orlen’s ownership of several Polish media outlets and potential human rights violations.

The Oil Fund holds a 1.15% stake in Orlen as part of its USD 1.26tn in assets.  On Wednesday, Norges Bank, which manages the Oil Fund, announced that it would place Orlen under observation for three years due to the possibility that the company may contribute to human rights violations.

The decision does not entail the immediate divestment of Orlen shares but will involve continuous monitoring of the company’s conduct and reassessment of its inclusion in the Oil Fund’s portfolio.