Russia halts oil supplies to Belarus on terms failure
By Dmitry Zhdannikov |
January 4, 2010, Monday
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Print Edition
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RUSSIA has halted oil supplies to Belarussian refineries after failing to agree terms for 2010, traders said yesterday, threatening a repeat of a dispute which disrupted supplies to elsewhere in Europe three years ago.
Deliveries to Belarus refineries were halted after talks broke down on New Year's Eve, two traders from major Russian oil firms told Reuters.
Transit flows to other parts of Europe have not so far been affected, but Germany and Poland are closely watching the stand-off after supplies to some of their major refineries were cut during a similar row between Moscow and Minsk in January 2007.
Talks on a new pricing structure for 2010 supplies restarted on Saturday and were continuing yesterday, said Igor Dyomin, a spokesman for Russian pipeline monopoly Transneft.
European politicians have repeatedly accused the Kremlin of using its energy might as a tool of intimidation against its neighbors, be it gas or oil deals with Belarus or Ukraine.
Russia, the world's largest oil and gas producer, says it is simply switching gradually to market terms after subsidizing neighbors with cheap energy for years.
Russian supplies
A fifth of Europe's gas comes from Russia via Ukraine and Belarus. Large volumes of Russian oil also go through pipelines that traverse the two ex-Soviet states.
The two traders said two Belarussian refineries - Naftan and Mozyr - had enough stockpiled crude to operate for around a week.
"In Belarus they say when holidays are over on Monday, Lukashenko will come back and decide what to do," said one trader, referring to Belarussian leader Alexander Lukashenko. Russia is on holiday until January 11, while Belarus goes back to work today.
Minsk has insisted that Russia supply duty-free oil not only for volumes consumed domestically in Belarus, but for all Russian crude supplied to the country.
Most of that crude is refined by Naftan and Mozyr for re-export to the West and only a small portion of refined products stays inside Belarus.
Traders said Mozyr and Naftan have stockpiles of 450,000 tons.
They also said Belarus had threatened to raise transit fee on Russian oil supplies to Poland and Germany 10-fold to US$45 per ton in retaliation against Russian demands.
That would make transit supplies of crude expensive and potentially disrupt flows to Poland and Germany.
Deliveries to Belarus refineries were halted after talks broke down on New Year's Eve, two traders from major Russian oil firms told Reuters.
Transit flows to other parts of Europe have not so far been affected, but Germany and Poland are closely watching the stand-off after supplies to some of their major refineries were cut during a similar row between Moscow and Minsk in January 2007.
Talks on a new pricing structure for 2010 supplies restarted on Saturday and were continuing yesterday, said Igor Dyomin, a spokesman for Russian pipeline monopoly Transneft.
European politicians have repeatedly accused the Kremlin of using its energy might as a tool of intimidation against its neighbors, be it gas or oil deals with Belarus or Ukraine.
Russia, the world's largest oil and gas producer, says it is simply switching gradually to market terms after subsidizing neighbors with cheap energy for years.
Russian supplies
A fifth of Europe's gas comes from Russia via Ukraine and Belarus. Large volumes of Russian oil also go through pipelines that traverse the two ex-Soviet states.
The two traders said two Belarussian refineries - Naftan and Mozyr - had enough stockpiled crude to operate for around a week.
"In Belarus they say when holidays are over on Monday, Lukashenko will come back and decide what to do," said one trader, referring to Belarussian leader Alexander Lukashenko. Russia is on holiday until January 11, while Belarus goes back to work today.
Minsk has insisted that Russia supply duty-free oil not only for volumes consumed domestically in Belarus, but for all Russian crude supplied to the country.
Most of that crude is refined by Naftan and Mozyr for re-export to the West and only a small portion of refined products stays inside Belarus.
Traders said Mozyr and Naftan have stockpiles of 450,000 tons.
They also said Belarus had threatened to raise transit fee on Russian oil supplies to Poland and Germany 10-fold to US$45 per ton in retaliation against Russian demands.
That would make transit supplies of crude expensive and potentially disrupt flows to Poland and Germany.
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