Pipeline operators in Poland and Russia reached an agreement last Friday, May 25, to ensure the continued flow of Kazakh oil to Germany through the Druzhba pipeline, averting a potential disruption in June, according to sources cited by Reuters. 

According to the report, the deal resolves an impasse over the certification of oil flow meters in Poland, which threatened to halt Kazakh oil exports to Germany by a June 5 deadline set by Russia's state-controlled pipeline operator Transneft.

Polish concerns centered on potential violations of Western sanctions against Russia if a Russian company serviced the meters. 

Under the new agreement, a non-Russian company, reportedly from Slovakia, will be responsible for servicing the meters on the Polish section of the Druzhba pipeline, effectively removing any sanctions concerns for Poland's state-owned pipeline operator PERN.

The need for periodic meter certification according to Russian standards had created the initial friction.

Transneft's warning highlighted Kazakhstan's dependence on Russian infrastructure for its oil exports. The landlocked nation relies on various Russian pipelines to transport the bulk of its daily production of 1.5 million barrels, which represents 1.5% of the global oil supply.

The Druzhba pipeline, one of the world's largest with a capacity of 2 million barrels per day, is operated by Transneft. Flows through the pipeline have significantly declined since the EU imposed sanctions on Russian oil following the invasion of Ukraine.

Currently, the northern leg of the Druzhba system, which connects Germany via Poland and Belarus, is used to transport Kazakh crude oil to the Schwedt refinery, a vital source of fuel for Berlin.

Despite the relatively modest volume of Kazakh oil, estimated at 1.2 million metric tons for 2024, it plays a crucial role in Germany's efforts to reduce reliance on Russian oil, a commitment made after the Ukraine invasion. 

Kazakhstan's state oil company, KazMunayGaz, recently confirmed the extension of its supply contract with the Schwedt refinery until the end of the year.

A PERN spokesperson confirmed ongoing efforts to find solutions with contractors that comply with existing regulations.