Ukraine to continue to honour contracts for oil transit to Europe

Comments by Ukrainian presidential aide Mykhailo Podolyak, reported by local media on Friday, had suggested flows of Russian oil may stop from January, but he later said Ukraine supported EU efforts to diversify its oil supply and would not break contracts running to 2029.

“Ukraine has fulfilled and will fulfill its contractual obligations in full until the scheduled completion date… because it concerns our bilateral relations with European countries,” Podolyak said.

The head of Ukrainian oil and gas group Naftogaz, Olekskiy Chernyshov, echoed that message.

“Ukraine remains a reliable partner for European countries,” he said in a statement. “We will continue to fulfill our obligations under the current gas and oil transportation contracts.”

The Druzhba pipeline carries oil from Russia to Belarus where it branches into its northern leg to Poland and Germany and a southern part to Ukraine, the latter route serving Slovakia, Hungary and the Czech Republic.

While the European Union has sought to wean itself off Russian energy supplies since Moscow’s invasion of Ukraine in 2022, the Czech Republic, Slovakia and Hungary have needed more time.

For gas, the region is facing a halt next year as Kyiv plans not to renew a contract with Moscow at the end of 2024.

Podolyak’s initial comments prompted one Czech official to say his country could cope with a halt to transit. “For the Czech Republic, it is not a problem,” the state energy security envoy Vaclav Bartuska said.

To end the country’s partial dependency on the Druzhba pipeline, Czech state-owned pipeline operator MERO has been investing in raising the capacity of the TAL pipeline from Italy to Germany, which connects to the IKL pipeline supplying the Czech Republic.

From next year, the increased capacity should be sufficient for the total needs of the country’s two refineries, owned by Poland’s Orlen of up to 8 million tpy of crude.

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