What is the market impact of Czech refineries shifting away from Druzhba?

In dynamic and highly integrated markets like commodities, any change in one component can have ripple effects on every other component within the same market.

A relevant example is the situation with the two refineries in the Czech Republic, Litvinov and Kralupy, which are working to reduce their reliance on Russian crude oil.

Ripple effects in the Czech refining sector

The Litvinov refinery, one of the largest in the region, has a processing capacity of 110,000 barrels per day, making it a key player in meeting local fuel demands. Meanwhile, the Kralupy refinery, though smaller with a capacity of 68,000 barrels per day, plays a complementary role in ensuring a stable supply to the market.

Both refineries regularly access and utilise both the Druzhba South pipeline, which transports Russian crude oil, and the TransAlpine pipeline (TAL), with its import terminal located in Trieste. Historical flow data shows that through June 2024, the Druzhba South pipeline transported approximately 170,000 barrels per day, with some exceptions for refinery maintenance. These volumes were sufficient to supply both refineries daily.

However, starting in July 2024, the volumes dropped significantly, allowing only enough oil to support the 68,000 barrels per day required by the Kralupy refinery.

Oil flow disruption 

On 4 December, reports emerged that oil flow through the Druzhba South pipeline had been "interrupted." However, Wood Mackenzie data revealed that while flows continued, there was a notable spike in volumes, reaching 175,000 barrels per day.

Adding to the uncertainty, the European Union's exemption allowing Czech refineries to purchase Russian crude oil via the Druzhba South pipeline expired on 6 December 2024. This raises critical questions about the possibility of an extension.

Subscribers to Wood Mackenzie’s European Pipeline Service can monitor daily volumes and stay informed through our portal.

If there are no extensions, how will these Czech refineries ensure their supply?

The alternative to current supply routes is the TransAlpine pipeline, which feeds into the IKL pipeline (Ingolstadt-Kralupy-Litvinov). The TAL begins at the import terminal in Trieste, Italy, and has a capacity of 900,000 barrels per day. In comparison, the IKL is a 714 mm (28-inch) pipeline designed to handle 221,000 barrels per day. This means there is sufficient capacity to meet the demand of 178,000 barrels per day from the two Czech refineries.

However, these refineries are not the only ones relying on oil from the TAL, which complicates the situation. With deliveries from Druzhba South no longer acceptable, the 900,000 barrels per day capacity from the TAL will now need to support eight refineries that collectively have a total capacity of 1,070,000 barrels per day.

Gain unparalleled access to real-time refining operations across the world

While the numbers indicate a supply deficiency, there is also some positive news. Wood Mackenzie’s Global Oil Storage Monitor reports that there are nine storage facilities along the routes of the TAL and IKL pipelines, with a combined capacity of 45.43 million barrels. The current volumes and utilisation rates for each facility are available on our portal.

Although a substantial buffer exists to absorb volume shocks, how can one effectively monitor the Druzhba South pipeline, the TransAlpine Pipeline, the Ingolstadt-Kralupy-Litvinov pipeline, and the nine storage fields in real-time?

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