Pipelines play a significant role in the international crude oil and oil product logistics. They allow exploiting remote oil fields and are a much cheaper and more convenient means of oil and oil product transportation than railways. Pipelines are especially relevant for territories with no or limited access to the sea. Thanks to the construction of pipelines, the last two decades have seen the emergence of new suppliers on the world oil market. For the latter, secure and economical transit through third countries in order to access world markets is of critical importance.
The key problems for pipeline transportation are the tariffs and the rules of access. In countries were oil transportation by pipeline has traditionally played a greater role, crude oil and oil products pipelines are often considered to be natural monopolies. Those countries often establish rules and tariffs for non-discriminatory access to services. Tariffs are normally regulated and only in exceptional cases are negotiated.
This study focuses on crude oil and oil products pipeline systems in Eastern and South Eastern Europe, the Caspian region and Central Asia. It considers:
- essential technical and economic elements, which influence costs of oil and oil products pipeline transportation;
- the methodology for calculating oil pipeline tariffs and the actual tariff rates;
- where relevant, rules for access to existing and new cross-border oil pipeline systems;
- treatment of pipeline transit against the background of the multilateral rules on transit established by the Energy Charter Treaty.