Russian oil company Lukoil (LKOH.RS) said Friday it is still in talks to supply crude oil to Germany by pipeline after suspending overland exports in February.
"Some talks are going on," between Lukoil and German-registered trading company Sunimex, a Moscow-based Lukoil spokesman told Dow Jones Newswires.
The two companies have been embroiled in a pricing dispute since February, when Lukoil suspended Russian oil supplied to German oil refineries through the Druzhba pipeline. The Lukoil spokesman said it was too soon to tell when the dispute would be resolved.
The standoff between Lukoil and Sunimex follows a similar pricing disagreement between the two companies last summer that was eventually resolved in August. Lukoil now says the prices agreed in August are outdated and is seeking to renegotiate.
"Last year we solved the problem with just one month of negotiations...this year it's different," he said.
Lukoil isn't supplying any crude to Germany through the Druzhba pipeline, Lukoil's President Vagit Alekperov recently said. Instead, the company is able to export crude to Germany by tanker from the Primorsk terminal along the Baltic Sea, the spokesman said.
The dispute could tighten gasoline U.S. gasoline markets if it begins to disrupt refinery production, market participants said.
Two of Germany's largest oil refineries receive Russian crude oil through the Druzhba pipeline, including the PCK Schwedt GmbH refinery - which is jointly owned by BP PLC (BP), Royal Dutch Shell PLC (RDSA), Total SA (TOT) and Agip SPA - and Total's 220,000 barrel a day Leuna refinery.
According to oil product traders, the Leuna refinery is set to undergo a full maintenance shutdown during May and June. But the estimated six-week maintenance period could be brought forward due to squeezed gasoline refining margins, according to Deutsche Bank analyst Jennifer Gordon.
"(The maintenance) adds to already-high European maintenance schedule as refineries tighten gasoline supply and margins," Gordon said.
Arbitrage economics for gasoline shipments from Europe to the U.S. are poor, keeping U.S. gasoline imports low, Gordon said. Refiners would lose four cents a gallon for gasoline shipments from northwest Europe to the U.S., she said.
Total declined to comment on refinery operations.