The biggest refiner of Hungary said it has paid Russia's transit fee to Ukraine to resolve a dispute that has resulted in a halt to oil flows to central Europe.
Ukraine and Russia have accepted the decision to settle transfer fees, according to the oil company that tried to unblock supplies.
Mol has conducted negotiations with the Ukrainian and Russian parties on the resumption of transportation through the Friendship pipeline, as stated in an e-mailed statement, referring to the English name of the Druzhba link from Russia. Mol said it transferred the fee due to the use of the Ukrainian section of the pipeline.
The flow of Russian oil through Druzhba on August 4 was blocked by Ukrtransnafta JSC, which operates Ukraine's oil network. Russian pipeline operator Transneft PJSC said in a statement on Tuesday. The halt occurred after Transneft s payment of transit fees for August was rejected by European banks that wouldn't accept the cross-border transfer without approval from national regulators due to European sanctions.
Oil prices fell as the link looked to resume flows.
The Transneft and Ukrtransnafta contract requires 100% prepayment for transit flows. The Russian pipeline operator received the money back on July 22, despite the fact that it paid the August transit fee on July 22, according to Transneft.
The European banks involved in the transaction are not authorized to make their own decisions on cross-border payments from Russia due to sanctions and need approval from their national regulators, according to Transneft.
By assuming the fee, Mol could provide a quick solution to the issue, the Budapest-based company said. The Ukrainian party has pledged to resume the transport of crude oil within a matter of days, which had been stopped a few days ago due to technical issues on the banking front.