Druzhba disruption: Czech Republic taps into oil reserves
Oil flow through the "Druzhba" pipeline to the Czech Republic has ceased, posing a challenge for Orlen Unipetrol. On Wednesday, the Czech government decided to lend the company up to 364,000 tonnes of crude oil from its strategic reserves if the supply interruption continues. This loan represents one-third of the total reserves and will allow the refinery to operate for approximately a month.
The loan aims to ensure a sufficient supply of oil in the Czech market. On Tuesday morning, the flow of oil through the "Druzhba" pipeline to the Czech Republic stopped. Deliveries via the western route, through the IKL and TAL pipelines from Italian ports via Germany, are ongoing. Consequently, Czech authorities have emphasised 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 access the credit almost immediately. However, Szvagr believes the company will initially use its reserves.
A credit agreement is expected to be signed by the end of the week. If Orlen Unipetrol refineries use the loan, the company will eventually return non-Russian crude oil, currently used by the Kralupy refinery, to the reserves.
This essentially means that the Czech market will continue to be consistently supplied with fuels and other petrochemical products, eliminating any reason for speculative increases in fuel prices - Szvagr emphasised.
Should the loan prove insufficient, the Strategic Reserves Administration is prepared to consider releasing additional reserves.
Oil from Russia, which made up 42% of Czech crude imports in 2024, is still being processed by the Litvinov refinery. Orlen Unipetrol announced recent technological improvements, 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 an extended period.
