Russia will not supply crude to Lithuania for a second month in a row in September after halting deliveries due to a pipeline leak, a preliminary export schedule showed on Tuesday. With no oil going to Lithuania, Transneft plans to increase supplies to Russia's main Baltic Sea outlet of Primorsk to a new monthly high of 5.83 m tonnes in September, up from 5.8 million tonnes in August. The boost to Primorsk and the re-routing of oil to Ukraine's Black Sea ports of Odessa and Yuzhny will allow overall shipments to remain largely unchanged despite a significant loss of throughput capacity to Lithuania. Also the Lithuanian daily "Lietuvos Ryvas" reported that Russian prosecutors sent a letter to the Lithuanian general prosecutor's office, demanding that it instantly send a list of shareholders in Mazeikiu refinery. The list is allegedly needed with reference to a trial involving Yukos's former top guns. Mazeikiu's top authorities rejected the demand.
Our view:
The story seems to have no end. Russia seemingly found the way to compensate for the losses caused by the cut off of Mazeikiu and now it is ready for a long siege. The news could fuel market concerns whether the acquisition of Mazeikiu still could be justified for PKN Orlen. Disregarding what other routes could supply the Lithuanian refinery, it will certainly have a negative effect on the margins.