Czech Republic secures oil supply amid Druzhba pipeline halt
Oil has stopped flowing through the "Druzhba" pipeline to the Czech Republic, posing a problem for Orlen Unipetrol. On Wednesday, the Czech government decided to lend the company up to 364,000 tons of crude oil from strategic reserves if the interruption in oil supply persists. This loan represents one-third of the total reserves and allows the refinery to operate for a month.
The loan aims to ensure an adequate oil supply in the Czech market. On Tuesday morning, oil stopped flowing through the "Druzhba" pipeline to the Czech Republic. Deliveries on the western route through the IKL and TAL pipelines from Italian ports via Germany continue. Therefore, Czech authorities emphasized that there is no risk of an oil shortage in the market.
According to Pavel Szvagr, head of the Strategic Reserves Administration, Orlen Unipetrol can immediately activate the loan. However, Szvagr assumes that the company will first utilize its reserves.
The loan agreement should be signed by the end of the week. If the Orlen Unipetrol refineries use the loan, the company will eventually return non-Russian crude oil, currently used by the Kralupy refinery, to the reserves.
In practice, this means that the Czech market will continue to be consistently supplied with fuels and other petrochemical products, so there is no reason for speculative fuel price increases - emphasized Szvagr.
The Strategic Reserves Administration is prepared to discuss releasing additional reserves if the loan proves insufficient.
Oil from Russia, which accounted for 42% of Czech crude imports in 2024, is still being processed by the Litvinov refinery. In recent months, Orlen Unipetrol announced improvements to its technology, stating that the Litvinov refinery is technically prepared for other oil blends. The second refinery, in Kralupy, has not been using Russian crude oil for a long time.
