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• Druzhba Oil Pipeline damaged by fire following Russian strike, Minister says

  Denys Schmyhal, Ukraine's Energy Minister, told Interfax Ukraine that the Ukrainian branch of Druzhba oil pipeline, which supplies Russian crude oil to Hungary and Slovakia, was severely damaged by fire following a Russian attack. Shmyhal said that the temperature conditions inside the oil pipe damaged the majority of the internal equipment, sensors, and other?equipment. Since January 27, oil shipments via the?pipeline, which is primarily operated in Russia, have been suspended. This follows a 'Russian attack on a?pumping installation in?western Ukraine.' The incident sparked a disagreement within the European Union as well as efforts from Hungary to block any new sanctions against Russia. Hungary has also accused Ukraine of interfering in the April elections and has blocked a 90-billion euro EU loan for Kyiv. Shmyhal, speaking to?Interfax Ukraine said that this damage (to the Druzhba pipe) is not visible from the exterior. He added that the repair costs will be calculated once the defects are examined. A spokesperson for the European Commission said that Ursula von der Leyen, President of the European Commission, will likely discuss Tuesday's?Druzhba Pipeline Problems? with Ukrainian President Volodymyr Zelenskiy.

• MOL Hungary says it received Ukrainian oil through Druzhba after the attack

  Hungary's MOL imported 35,000 tons (of Ukrainian crude) via the Druzhba Pipeline at Kyiv’s request, according to executive chairman Zsolt Hernadi of commercial television station ATV. This was after a fire and strike near the Druzhba Pipeline in late January. Ukrainian officials in the industry did not respond immediately to a comment request. Since January 27, oil shipments through the pipeline to Hungary and Slovakia, the only European Union nations still importing Russian crude, have been suspended following what Kyiv claims was a Russian assault on pumping stations in western Ukraine. Hungary and Slovakia claim that Ukraine has blocked the use of the pipeline for political reasons. This prompted Budapest to block any new EU sanctions against Russia. Kyiv claims that repairs will take time. According to a report last week, which cited 'three industry sources who are familiar with the issue, before the Druzhba pipe was damaged, it exported some Ukrainian oil, and much larger volumes of Russian crude. Hernadi stated that MOL believes the pipeline itself did not suffer any damage. "When the fire started...from other stores they began to pump Ukrainian crude in the pipeline. "Our Ukrainian colleagues asked us to take this oil over in order to prevent further escalation of the fire and problem," Hernadi stated late on Monday. "And we took 35, 000 tons of Ukrainian crude that?arrived over the Druzhba pipe in 2-3 days." The Ukrainian embassy in Budapest said in a statement issued late Monday night that the "possibility and timing of repairs on the pipeline depend solely on security circumstances" because Russia continues its attacks. Hernadi stated that the capacity of the Adriatic Pipeline, an alternative to Druzhba for bringing up seaborne oil shipments from Croatia, will be tested "repeatedly" this year. Hernadi stated that MOL's Hungarian main refinery is still operating about 40% below its capacity as a result of a fire in the previous year. This will continue until August.

• MOL Hungary says it has received Ukrainian oil through the Druzhba Pipeline

  Zsolt Hernadi, executive chairman of MOL, told ATV that the company received a total of 35,000 tons?of?Ukrainian?crude via the Druzhba pipeline at Ukraine's request?after a fire and a hit near the pipeline. "The pipeline suffered 'no damage.' All the more so because a fire started after the (Russian) attack, and then they began to pump Ukrainian crude from other storages into the pipeline. Hernadi stated that after the fire started, the Ukrainian colleagues asked us to take control of the oil in order to prevent further damage and a fire. "And we bought (took over)?35,000 tonnes of Ukrainian crude that?arrived on the Druzhba pipe over 2-3 days." Since January 27, oil shipments from western Ukraine to 'Hungary and Slovakia' have been suspended through the Russian-operated pipeline. (Reporting by Krisztina Than)

• Sources say that Druzhba Pipeline carried Ukrainian and Russian oil prior to the attack.

  Three industry sources said that the Druzhba Pipeline exported some Ukrainian oil, and much larger volumes of Russian crude before it was damaged by a Russian strike a month earlier. The strike 'has caused a halt to supply', they added. Since January 27, oil shipments from Russia to Hungary and Slovakia via the pipeline they operate have been suspended. Kyiv claims that Russia attacked pumping stations in western Ukraine. This sparked a dispute within the European Union and Hungary's efforts to block any new sanctions against Russia. It was not previously known that the Druzhba Pipeline is used to export Ukrainian Oil to EU member countries Hungary and Slovakia. Ukraine is denied the export revenue and funds it needs to control its budget deficit. If the suspension is maintained, it could force Kyiv's oil production to cease. The Ukrainian energy ministry didn't immediately respond to an inquiry for comment. Ukraine has been encrypting all information about oil exports and processing since the Russian invasion of four years ago. RUSSIA TARGETS UKRAINE’S OIL PRODUCTION Ukraine will produce about 1.7 millions tons of oil by 2021. It imported large volumes of oil that were processed at the Kremenchuk Refinery, which has a 19 million ton capacity per year. In February 2022, Russia started attacking Ukraine's refineries. One source said that the destruction of Ukraine's last refinery capacity by mid-2025 forced traders and fuel importers to increase their fuel imports. This created a dilemma about what to do with Ukraine’s oil production. Source: Ukraine had no refining capability at home, so it was forced to export its oil. Druzhba?was then the only option available. State Property Fund owns the section of pipeline network in Ukraine. It was not possible to determine the current level of production in Ukraine. Ukrainian media reported in 2024 that Ukraine's biggest oil company Ukrnafta would produce 1.4 million metric tons of oil, about the same amount as it did in 2023. According to a second source in the industry, Ukraine was injecting 40,000 metric tonnes of oil per month into the Druzhba Pipeline before Russia's strike. Other sources confirmed that there were exports, but they did not give any estimates of the volumes. The three sources requested anonymity due to the sensitive nature of the subject. According to a second source, Ukraine had been injecting crude oil in the pipeline in Brody in the west of Ukraine for several months before the Russian attack on January. MOL, a multinational Hungarian oil company, processes the oil delivered by pipeline. MOL buys a variety of oils, including Ukrainian oil, to diversify its supply. This includes Russian oil. He refused to provide more details. On Friday, the Hungarian and Slovakian governments did not immediately reply to comments. Hungary and Slovakia continue to rely on Russian oil despite other EU nations ceasing their use. They have also accused Ukraine of intentionally prolonging the outage. Hungary has also accused Ukraine of meddling with its elections in April, halted a 90 billion euro EU loan Kyiv depends on, and blocked a second round of European sanctions against Russia. A WORLD-LONG PIPELINE HAS LOST IMPORTANCE The southern branch of Druzhba was constructed in the 1960s, during the Soviet period. It is where the bulk of the oil that goes to Europe comes from. The name of the pipeline means friendship in English. Moscow has accused Kyiv that it is threatening Europe's security of energy by stopping the flow of Russian oil through the pipeline. Druzhba, one of the largest oil pipelines in the World, has lost its importance since the full-scale Russian invasion of Ukraine, and the subsequent European sanctions. ExPro, a Kyiv-based oil consulting firm, said that transit through the southern branch will reach a low of 9.7 millions tons in 2025. ExPro reported that Slovakia received 4.9 millions tons of oil while Hungary received 4.35 million tons. The Czech Republic stopped using Russian oil by April 2025. The northern leg, which was the main supply route for Poland, is only using a fraction of its capacity in order to transport Kazakh oil to Germany. Ukraine has been planning to use the Druzhba Pipeline to pump Caspian Oil to Europe for a long time. The Odesa-Brody oil pipeline, which connects Black Sea oil terminals to Druzhba in 2002, has carried very little oil since then. On Wednesday, Ukraine's president Volodymyr Zelenskiy stated that this section was also attacked by the war. Brussels has not taken sides in the Druzhba dispute, but has asked the Hungarian prime minister Viktor Orban respect the EU loan agreement for Ukraine. It also plans to submit on April 15 a legal proposal that would permanently ban Russian oil imports. Slovakia announced that the Druzhba Pipeline was out of service on February 13th, long after Russian oil shipments were stopped last month. Reporting by Daniel Flynn; Editing by Barbara Lewis and Daniel Flynn

• Sources say that Druzhba Pipeline carried Ukrainian and Russian oil prior to the attack.

  Three industry sources said that the Druzhba Pipeline exported some Ukrainian crude oil as well as much higher volumes of Russian crude before it was damaged by a Russian strike a month earlier. This has caused a halt in supply. Since?January 27, oil shipments from Russia to Hungary and Slovakia have been suspended. This follows what Kyiv claims was a Russian attack on pumping stations in western Ukraine. This sparked a dispute with the European Union, and led to a rift between Hungary and the EU. It was not previously known that the Druzhba Pipeline is used to export Ukrainian Oil to EU member Hungary and Slovakia. Ukraine is denied the export revenue and funds it needs to control its budget deficit. If the suspension is maintained, it could force Kyiv's oil production to cease. The Ukrainian energy ministry didn't immediately respond to an inquiry for comment. Ukraine has been encrypting all information about oil exports and processing since the Russian invasion of four years ago. RUSSIA TARGETS UKRAINE’S OIL PRODUCTION Ukraine will produce about 1.7 millions tons of oil by 2021. The country imported large volumes of oil that were refined at the Kremenchuk Refinery, which has a 19 million ton capacity per year. In February 2022, Russia started attacking Ukraine's petrochemical refineries. One source said that the destruction of Ukraine's last refinery capacity by mid-2025 forced traders and fuel importers to increase their fuel imports. It also created a dilemma about what to do with Ukraine’s oil production. Source: Druzhba is the only option available because Ukraine has no refining capability. State Property Fund owns the section of the Ukrainian pipeline network. It was not possible to determine the current level of production in Ukraine. Ukrainian media reported in 2024 that Ukraine's largest oil firm Ukrnafta would produce 1.4 million tons of oil. This is roughly the same amount as it produced in 2023. According to a second source in the industry, Ukraine injected 40,000 metric tonnes of oil per month into the Druzhba Pipeline before Russia's strike. Other sources confirmed that there was exporting but didn't provide an estimate of the volume. The three sources requested anonymity due to the sensitive nature of the subject. According to a second source, Ukraine injected crude oil in the pipeline at Brody in the west of Ukraine for Europe several months before the Russian attack on January. MOL, a multinational oil company based in Hungary, processes the oil delivered through pipelines. MOL didn't immediately respond to our request for comment about whether or not it received Ukrainian oil through pipelines and what volume. On Friday, the Hungarian and Slovakian governments did not immediately reply to comments. Hungary and Slovakia, while other EU countries stopped using Russian oil have continued to rely on it. They have also accused Ukraine of purposefully prolonging the?pipeline outage. Hungary has also accused Ukraine of meddling with its elections in April, it has stalled the 90 billion euro EU loan Kyiv depends on, and it has blocked new European sanctions against Russia. A PIPELINE THAT WAS ONCE ONE OF THE LONGEST IN THE WORLD HAS LOST IMPORTANCE The southern branch of Druzhba was constructed in the 1960s, during the Soviet period. It is where the majority of oil from Russia has been transported to Central Europe. The name of the pipeline means friendship in English. Moscow accused Kyiv that it was threatening "Europe's energy safety" by preventing Russian oil from flowing through the pipeline. Druzhba, one of the world's largest pipelines, has lost its importance since the Russian invasion of Ukraine. Expro, a Kyiv-based oil consulting firm, said that transit through the southern branch reached a low of 9.7 million tonnes in 2025. ExPro reported that Slovakia received 4.9 millions tons of oil while Hungary received 4.35 million tonnes. The Czech Republic stopped using Russian oil by April 2025. The northern leg, which was the main supply route for Poland, is only using a fraction of its capacity in order to transport Kazakh oil to Germany. Ukraine has been planning to use the Druzhba pipeline to pump Caspian Oil to Europe for years. It completed the construction of the Odesa-Brody Pipeline in 2002 to connect Black Sea Oil Terminals with Druzhba. However, since then, this pipeline has?carried very little oil. On Wednesday, Ukraine's president Volodymyr Zelenskiy stated that this section was also attacked by the war. Brussels has not taken sides in the Druzhba dispute, but has asked the Hungarian prime minister Viktor Orban respect the EU loan agreement for Ukraine. It also plans to submit on April 15 a legal proposal that would permanently ban Russian oil imports. Slovakia announced that the Druzhba Pipeline was out of service on February 13th, long after Russian oil shipments were stopped last month. Reporting by Daniel Flynn; Editing by Barbara Lewis and Daniel Flynn

• Russia aims to increase exports of Urals grade to China

  Urals crude differentials have remained unchanged in a'muted market,' while traders are looking at a broader discounting to Brent grade, as Russia diverts its exports from India to China, with higher freight costs and wider discounts. Some market participants expect that the discount for Urals will increase by up to $5 per barrel, from the current $10-12 on a delivered-to port basis. Hungarian PM Viktor Orban asked for a fact-finding mission to assess damage caused to the Druzhba Oil Pipeline in Ukraine on Wednesday. He suggested that this could unblock EU funding to Ukraine. MOL Group, a refiner, said that in an email statement sent on Thursday, the Croatian pipeline operator JANAF should allow transit to Hungary and Slovakia of Russian oil transported by sea. It added?that these imports are not subject to EU sanctions. PLATTS WINDOW * There were no bids or offers made on Thursday for Urals BTC, CPC Blend, and Azeri BTC, traders said. * The Caspian Pipeline Consortium which transports oil from Kazakhstan to a Russian terminal on the 'Black Sea,' increased its exports by 12% in 2012, reaching 70.52 millions metric tons. * The United States has slowed down the sale of international assets owned by the Russian oil giant Lukoil to exert pressure on Russia during the peace talks in Ukraine. (Reporting and Editing by Shailesh Kumar)

• Russia accuses Ukraine that it is threatening European energy safety with the Hungary/Slovakia Oil Stoppage

  The Russian Foreign Ministry's Maria Zakharova accused Ukraine of a threat to Europe's energy security by stopping the flow of?Russian crude oil through the Druzhba pipeline into Hungary and Slovakia. Ukraine says that the pipeline has still not been repaired after being damaged by Russian air strikes in late January. On Monday, in another incident, Kyiv's drones hit a Russian pumping station servicing the same.pipeline. Hungary blocked this week new EU sanctions against?Russia, and an EU loan for Ukraine in response to the oil shutdown. Zakharova said that the inaction of Brussels is surprising because the blockage by Ukraine of the Druzhba Oil Pipeline threatens energy security for Hungary, Slovakia, and Europe as a whole. Ursula von der Leyen, President of the European Commission, said that Brussels had requested?Ukraine speed up repairs on the damaged pipeline. Volodymyr Zelenskiy, Ukrainian President, said the?day after that it could not be repaired quickly. (Reporting and writing by Dmitry Antonov; Editing by Andrew Osborn).

• CPC predicts a 12% increase in oil exports by 2025

  The Caspian Pipeline Consortium (CPC), which transports oil from Kazakhstan to a terminal on the Russian Black Sea, increased its exports last year by 12%, reaching 70.52 millions metric tons. CPC, which is responsible for delivering'more than 1% of the world's oil, has been under scrutiny due to a number of disruptions in its operations. This includes a drone attack by Ukraine on November 29 that damaged a vital piece of exporting equipment. CPC, according to three industry sources earlier this month, plans to increase CPC Blend crude exports to 1.7 million barrels per day (bpd), up from 1.1million bpd in the revised February plan. CPC said Thursday that Kazakhstan's oil fields - Tengiz Karachaganak, and Kashagan -- will supply its network with 36.6 mt, 9.2 mt, and 17 mt respectively by 2025.

• Andy Home: Risks to Western aluminum supply increase as Iran war escalates

  The Strait of Hormuz is the Gulf's main shipping chokepoint, and it is no longer just about oil?and?gas. According to the International Aluminium Institute (IAI), the region is a major producer of aluminum, with over 8% global production last year. Smelters from Bahrain, Qatar, Saudi Arabia, and the United Arab Emirates ship over 5 million metric tonnes of metal through the Hormuz Strait every year. Bauxite, alumina and other materials are transported the opposite way in order to feed the smelters. These plants have not yet been targeted directly in the increasing hostilities. Qatar Aluminium, owned jointly by Norsk Hydro of Norway and QatarEnergy in Qatar, is already facing closure due to the disruptions caused by the suspension of the country's natural gas production. The greater the danger to Western manufacturers, the longer the Strait of Hormuz remains blocked. Key Western Supplier Middle East has become a major hub for aluminium production in the past two decades. The region's vast gas reserves are used to power the energy intensive smelting processes. The Gulf Cooperation Council's (GCC) production has increased from 2.7 millions tons in 2010 up to 6.2 millions last year. It is now the second-largest regional supplier, outside of China. Make that the biggest. In the IAI's figures for Europe (the largest non-Chinese production hub in Europe on paper), there are 4 million tons of Russian metal produced annually. Due to Ukraine sanctions, Russian aluminum cannot be imported into the U.S. The European Union has also phased out imports for the same reasons. GCC metal producers are a key component of Western supplies of a material used in a variety of industries, from packaging to automotive and construction. MULTIPLE CHANNELS Multiple channels are involved in the potential impact of Western buyers. Gulf smelters export more than just primary aluminium. The smelters are also important producers of alloys, and they feed the local clusters of semi-manufactured products plants. According to World Bureau of Metal Statistics' official data, Bahrain exported 1 million tons of metal alloys, 500,000 tons of finished products, and 160,000 tonnes of virgin metal in the past year. Exports were made to more than 70 countries, with significant amounts going to Europe and America. A protracted stoppage of regional production or exports would affect multiple countries, and many parts of the processing chains. VULNERABLE MARTENS Aluminium is still as vulnerable to supply disruptions as it has been for years. China's smelter industry has reached its 45 million ton capacity limit, causing both exports and output growth to slow. The phase-outs of Russian imports and the closing of the Mozal Smelter in Mozambique have squeezed Western buyers. London Metal Exchange's (LME) stock, which includes metal stored off-warrant, dropped by 331,000 tonnes last year. It has also fallen another 84,000 tonnes since January 1. LME Aluminium prices were already rising before the Iran Crisis. The news on Tuesday that Qatar Aluminium may be facing a suspension in operations, has pushed three-month metal up to $3,315 a ton. This is within striking distance from January's near-four-year-high of $3,356. Power THREAT Western aluminium purchasers are likely to experience a supply shock. However, it is also possible that a second one will occur in the form higher energy prices. The closure of other smelters because of high electricity prices is one reason that GCC has become such an important part of the Western market. Mozal, a Mozambican plant that is a major European supplier, is an example. The surge in power prices that followed the invasion of Ukraine by Russia four years ago has led to the loss of several plants across Europe. Western aluminum producers do not need another energy shock. The last thing Western buyers want is to lose their supply due to producers on the other side of the Strait of Hormuz. Andy Home is a journalist. This column is a favorite of yours? Open Interest (ROI), a data-driven, thought-provoking commentary on the markets and finance is available at Open Interest. Follow ROI on LinkedIn, X and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.

• NextEra plans to increase the power of data centers to up to 30 gigawatts by 2035

  NextEra Energy is the largest U.S. electric?company. It expects to build between 15 and 30 gigawatts?of?new generating capacity?for?the?U.S. In a Tuesday presentation, NextEra Energy said that it would build data?centers over the next nine-year period. The biggest obstacle to the expansion of artificial intelligence has been access to power. This is because data centers are energy-intensive and must be used to train, test, and deploy this technology. The U.S. electrical system was once able to accommodate data centers, but their?immediate and huge energy needs are requiring the construction of new power stations. Twenty-two million homes or about half of California's population can be powered by thirty GW. Natural?gas is expected to provide a large portion of the power needed for data centers. In a?presentation, NextEra said that it has a pipeline with more than 20GW of gas-fired generation. NextEra's headquarters are in Florida. NextEra Energy Resources is a grouping of a natural gas-fired power-developing arm and Florida Power and Light, a regulated electric utility. (Reporting and editing by Kevin Liffey; Laila Kearney)

• Drone attacks and extreme weather limit gains from rising oil prices

  Sources in the industry said that Russia was unable to take advantage of this week's spike in global crude oil prices because a combination of?days?of Ukrainian drone attacks, and harsh winter storms?have severely curtailed their?capacity?to export. Three trade sources and Russian and Ukrainian officials confirmed that the Sheskharis Oil Terminal in Novorossiysk Port, Russia, suspended oil loadings Monday following a drone attack by Ukraine which damaged and destroyed dozens of buildings and set a fuel depot ablaze. Crude oil benchmarks rose 8% on Monday, the third consecutive session of gains, as?the U.S. - Israel conflict with Iran intensifies, disrupting fuel deliveries and raising fears about further Middle East oil supply disruptions. The Russian federal budget deficit is increasing due to a shortfall in oil and natural gas revenues, which make up almost?a quarter (or more) of the budget's proceeds. The terminal at NOVOROSSIYSK is still closed The latest LSEG data shows that the price of Russian Urals oil in Baltic ports increased to $51.6 per barrel on Monday. Traders expect further gains on Tuesday. Russian exporters were unable to respond and boost shipments due to Ukrainian drone strikes, severe weather, and other factors. It was unclear when the Sheskharis terminal would reopen. The oil terminal is scheduled to load 500,000 barrels of oil per day this month. One source in the trading industry said that Sheskharis would restart loadings as early as March 5-6. Transneft and the Novorossiysk port authority have not responded to comments made. The ICY conditions hamper the diversion of CRUDE to ports The severe ice conditions in the Baltic ports of Primorsk & Ust-Luga have severely reduced loading capacity. The European authorities have also?intensified the seizure and detention of "shadow fleet" oil tankers that are used to transport Russian oil. This has added further complications. These tankers are operated by opaque owners and have lax safety standards. There are few options to reroute crude oil through the Caspian Pipeline Consortium pipeline (CPC), as it is prone to weather delays and most of its capacity has been used by Kazakhstan's Tengiz Field, which is recovering production. The Druzhba pipeline, which supplies Hungary and Slovakia, remains halted. Both countries blame Ukraine for the suspension. Kyiv claims that the pipeline has been damaged by Russia. Traders said that in March, Kozmino Port is expected to load around 1 million barrels of oil per day.

• London Marine Insurance Company expands high-risk area in the Middle East Gulf as conflict escalates

  According to an advisory published on Tuesday, London's marine insurers have widened their high-risk area in the Gulf as the conflict rages in the Middle East. Underwriters closely follow the Joint War Committee's guidance, which is comprised of syndicate members and representatives of the London Insurance Company Market. In a statement, the JWC declared that waters surrounding Bahrain, Djibouti Kuwait, Oman, and Qatar were high-risk zones. In a statement by the committee's secretary Neil Roberts, the JWC decided to review the areas during a meeting held on Monday. "In light of recent events", Roberts stated. He also added that these geographical?areas are among those assessed as being at greater risk of war-related hazards. Gulf War risk premiums are five times higher than they were a week earlier, before Israel and the U.S. began airstrikes against?Iran. This has resulted in an increase of hundreds of thousands of extra dollars for each shipment. Sources in the industry said that expanding the high-risk waterways area to include other parts of the Gulf region was seen as a way to fill gaps where war risk insurance hadn't been applied before, leaving ships without adequate coverage. Munro Anderson, of Vessel Protect (part of Pen Underwriting), a marine war insurance specialist, said: "The expanded designation by the JWC... helps stabilise the global supply chains because it reduces uncertainty about the?movement?of energy, commodities, and?essential good." (Reporting and editing by Susan Fenton, Ros Russell and Jonathan Saul)