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Wed May 15, 2019, 10:01 AM

In limbo: the dirty Russian oil no one wants to pay for

Source: Reuters

BUSINESS NEWS MAY 15, 2019 / 8:41 AM / UPDATED 42 MINUTES AGO

In limbo: the dirty Russian oil no one wants to pay for

Dmitry Zhdannikov, Olga Yagova, Gleb Gorodyankin
7 MIN READ

LONDON/MOSCOW (Reuters) - The bills are due for millions of barrels of contaminated Russian oil that have been stuck for weeks in pipelines from Belarus to Germany - but no one wants to pay.

Western oil companies and European refiners that bought the oil a month ago, before discovering it was unusable, have so far refrained from freezing payments as they are keen to maintain good long-term relations with the world’s second biggest oil exporter and avoid protracted legal battles in Russian courts.

Instead, several Western buyers have asked Russian producers if they can postpone payments for the tainted crude while buyers and sellers agree how to resolve the mess - and how to share the costs, four traders involved in Russian oil trading said.

For the buyers of an estimated 19 million barrels of contaminated crude stuck in the pipeline and loaded on tankers, it’s a $1.2 billion question.

The buyers want Russian producers to give guarantees in the form of bank deposits that they will contribute to the clean-up, or delay payments due this week until the crisis is resolved, said a source at European refiner, who declined to be named.

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Read more: https://www.reuters.com/article/us-russia-oil-insight/in-limbo-the-dirty-russian-oil-no-one-wants-to-pay-for-idUSKCN1SL1JG

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