As at the end of February, the Czech Republic had strategic oil stocks in the amount corresponding to 90 days of normal consumption. The 330,000 tonnes released correspond to 14 days of normal consumption in the country.
The crude oil stock will be loaned to Orlen Unipetrol to continue full production of motor fuels at the Kralupy and Litvinov refineries of the company. In parallel to the processing of oil obtained as a loan, Orlen Unipetrol is actively seeking alternative supply channels in the fuel market to replace the lost Russian oil flow.
Currently, all the strategic crude oil stocks are of Russian origin, but they are now to be replaced by non-Russian fuel. The Czech Republic is also in the process of replacing the stock that has so far been kept only in crude oil with a stock kept partly in finished products such as petrol and diesel. A stock of finished products will allow for a faster and more flexible response to supply disruptions in the event that the refining capacity of the country is disrupted.
At the beginning of March, oil supplies to the Czech Republic stopped via the southern branch of the Druzhba pipeline.
According to the Czech side, the disruption is due to restrictions imposed on the Russian banking sector last year, which prevent Orlen Unipetrol from paying its Russian partner for oil supplies. It is believed that this disruption of supplies could be long-lasting or even permanent.
The country’s two other pipelines to Germany could cover the deficit left by the halted shipments via the Druzhba pipeline, but due to repair work from April to June, the capacity of one of the pipelines will be reduced. In order to overcome the temporary supply problem, the government decided to partially release the strategic stocks. There is currently no fuel shortage in the Czech Republic.
According to the Estonian Stockpiling Agency, the disruption of the Druzhba pipeline to the Czech Republic will not affect the refineries supplying the Baltic region. However, this is a significant change in the supply of crude oil to Central European refineries and it is difficult to assess the longer-term impact on the supply of liquid fuels in the region.
The disruption of the Druzhba pipeline is a market disruption against which countries dependent on oil imports, including Estonia, have taken precautions by building up national fuel stocks. The strategic liquid fuel stocks of Estonia cover 90 days of regular consumption and is kept 100% in finished products such as petrol, diesel, and aviation fuel. The bulk, or 88%, of the national fuel stocks are stored in Estonia.
In addition to the strategic stocks owned by the state, there is a further 118 days’ supply of petrol and 25 days’ supply of diesel in Estonia as commercial stocks of fuel companies.
