Dmitry Orlov
Around the end of April an article appeared on Oilprice.com: “Germany Scrambles for Polish Oil Route as Russia Halts Druzhba Flows”:
“Germany is hunting for solutions to reroute crude oil supplies to the PCK Schwedt refinery after Russia said it would halt Kazakh oil deliveries through the Druzhba pipeline starting May 1, with roughly 43,000 barrels per day now at risk. Berlin is now in talks with Poland over moving replacement barrels through the port of Gdansk, with potential deliveries flowing onward to Schwedt, the refinery that supplies much of eastern Germany, including Berlin, with fuels. Kazakhstan shipped 2.146 million metric tons to Germany through Druzhba last year, up 44% from 2024, with another 730,000 tons delivered in the first quarter. Poland says it has the technical capacity to handle additional flows, but port access, shipping schedules, crude availability and refinery configurations all matter, too. Replacing pipeline crude with seaborne barrels is rarely a one-for-one swap… Alternatives do exist for Schwedt, but they are costlier and more complicated. The refinery has increasingly leaned on crude arriving through Baltic routes and Germany’s Rostock port, but those channels are limited.”
And this is all you would know of this if you relied exclusively on English-language sources. But dig a little into Russian-language publications, and a much more detailed picture emerges. The operator of the Russian-owned Druzhba (“Friendship”) pipeline is the Russian company Transneft while the oil for it did indeed come mainly from Kazakhstan’s three largest fields – Tengiz, Karachaganak and Kashagan – which were developed and are operated on the basis of production sharing agreements (PSA). The partners of these agreements are as follows:
• Tengiz: Chevron — 50%, ExxonMobil — 25%, and state-owned KazMunayGas — 20%.
• Karachaganak: Shell — 29.25%, Eni — 29.25%, Chevron — 18%, and state-owned KazMunayGas — 10%.
• Kashagan: Eni — 16.81%, Shell — 16.81%, TotalEnergies — 16.81%, CNPC — 8.33%, and state-owned KazMunayGas — 16.88%.
The next obvious question is, Why would these Western majority stakeholders wish to deprive Germany of access to cheap oil (because pipelined oil is normally cheaper than oil shipped by sea)? This answer is also obvious: with a pipeline, the seller is captive — only able to ship oil to the end point of the pipeline while with seaborne oil the seller is free to ship to anywhere in the world where the price is the highest. Demand for real, physical oil is currently at an all-time high and shipping through Russia’s Baltic Sea oil ports such as Ust’-Luga and Primorsk eliminates dependence on a single buyer.
Is this profitable? Absolutely! Is this beneficial for Kazakhstan’s state budget? Of course! The higher the prices achieved, the greater the revenues to the budget and/or the state-owned company KazMunayGas — and, of course, for Chevron, ExxonMobile, Shell, Eni, TotalEnergies and, last but not least, China’s CNPC.
Is this beneficial for Russia? If oil from these companies is loaded at Ust-Luga and Primorsk, wouldn’t these companies suddenly become most interested in the security of Russia’s ports and in ending Ukrainian drone flights which have been threatening them? The sudden, simultaneous imposition of a ban on Kiev’s use of their airspace from Vilnius, Riga, and Tallinn had everything to do with supporting the interests of Chevron, ExxonMobile, Shell, Eni and TotalEnergies.
Germany is not being deprived of the oil it needs. If Germany wishes to continue to import oil from Kazakhstan, all it has to do is:
1. Pay the highest price in the world for each tanker load, as determined at the time of sailing from Ust’-Luga or Primorsk. Or they could just go and shop around. The fact that Scwedt is fine-tuned to process Kazakh oil shouldn’t stop them.
2. Negotiate a transshipment agreement with the Polish company Orlen, which owns berths in the port of Gdańsk (formerly, Danzig). This should be easy; after all, the Germans and the Poles are age-old friends, right?
3. Put enough international pressure on all involved to provide for the security of Primorsk and Ust-Luga and the sailing of tankers, including Russian-flagged ones, throughout the Baltic.
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Via https://boosty.to/cluborlov/posts/94f7cdde-1c3d-4139-8ba3-a464625231ee
The Most Revolutionary Act 