Russian Oil Contamination Still a Problem for Buyers at Ust-Luga Port

Russian oil quality from the Baltic port of Ust-Luga was improving on Thursday but still not good enough for refiners in Europe, with required standards expected only by May 11, trading sources said.

The oil has been contaminated with organic chlorides, which can destroy refining equipment. Russian government officials and pipeline monopoly Transneft had promised to fix the problem by May 6, but the deadline kept being postponed.

As of Thursday, organic chloride content in Ust-Luga stood at 50-60 parts per million (ppm), still above 10 pmm normal levels, four trading sources said.

Russian oil firm Surgut told its oil buyers clean crude had started arriving into Ust-Luga tanks on May 9 and its cargoes loading on May 19, 21, 28 would be fully in line with standards, traders said.

However, it will take time before Transneft can empty oil already accumulated in tanks in Ust-Luga, meaning clean oil will load into tankers only around May 11, two trading sources said.

(Reuters, Reporting by Dmitry Zhdannikov and Olga Yagova; Editing by Elaine Hardcastle)