Russia's Entire Business Model Is Now At Risk

[TomSea]

Russia's Entire Business Model Is Now At Risk - Tsarizm
by L Todd Wood
April 27, 2019



On the 19th of April Russia’s neighbor Belarus noticed a significant deterioration of the quality of crude oil being shipped through the Druzhba pipeline through Belarus to Europe. The name of the crude delivery channel means ‘friendship’ and was built during Soviet times to supply the Kremin’s ‘friends’ behind the Iron Curtain. Today the pipeline is the longest in the world and possibly the most important in Europe, feeding East and West alike.

Russia’s economy and federal budget is heavily dependent on revenue from hydrocarbon production and delivery. The Trump administration has made the Nord Stream II pipeline, currently being constructed to supply natural gas to Germany, a European security issue.

Poland and Germany have suspended accepting supplies from the Druzhba pipeline. Belarus has made an offer to Russia to reverse oil flows to get rid of contaminated oil and start pumping oil via an alternative route, Belarusian state oil concern Belneftekhim said on Thursday, reported Reuters.

Read more at: https://tsarizm.com/news/eastern-europe/2019/04/27/russias-entire-business-model-is-now-at-risk/

[Elderberry]

https://www.bloomberg.com/news/articles/2019-04-26/europe-stops-taking-piped-russian-oil-because-of-contamination

The piped oil became tainted by organic chlorides that, when refined, become hydrochloric acid that can damage the plants. The issue, first raised by Belarus last week, has also affected supplies from the Russian port of Ust-Luga in the Baltic Sea, according to a person familiar with the matter. There are no signs that shipments from Novorossiysk or Primorsk, two other Russian tanker-loading facilities, have been disrupted.

Organic chlorides are not naturally occurring and are used in upstream processes to boost output, “but must be removed before bringing crude parcels to market,” said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd.

While the contamination threatened refiners, analysts saw few risks for Russian oil producers, unless the situation lasted for more than a couple of weeks.

[Joe Wooten]

Corruption wins again!