UPDATE 1-Russia, Belarus to discuss resumption of pipeline oil supplies

Russian Deputy Prime Minister Dmitry Kozak will on Thursday discuss a resumption of oil supplies along the Druzhba transit pipeline with his Belarusian counterpart Igor Lyashenko, Kozak's aide told reporters.

Piped exports of Russian crude have been disrupted since late April after high levels of organic chloride were found in oil sent via Druzhba to the Baltic port of Ust-Luga. Belarusian President Alexander Lukashenko said last week his country had faced "enormous" costs due to the contamination and expected compensation from Russia, although the mechanism for any redress and who will pay remain unclear.

The disruption of exports from Russia, the No.2 crude exporter after Saudi Arabia, has sent shockwaves through global oil markets and forced Moscow to cut its oil production to an 11-month low of around 11.16 million barrels per day. Belarus is a major transit route for Druzhba (Friendship). The Belarusian Mozyr oil refinery is a hub along the pipeline which splits there into two legs, one leading to Poland and Germany, another going south to Ukraine, Hungary and Slovakia.

On Tuesday, pipeline operators from Ukraine, Russia, Belarus and other countries held crisis talks in Bratislava but the meeting yielded no concrete agreement. Talks will continue at a later date in Moscow. The International Energy Agency said the impact on European refinery throughput in the second quarter of 2019 from the pipeline contamination is seen at roughly 250,000 barrels per day, under 2% of the continent's product demand.

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