BELARUS NEWS AND ANALYSIS

DATE:

08/01/2007

Europe hit as Russia halts oil exports via Belarus

Russian oil supplies to Poland, Germany and Ukraine have been cut amid a trade row between Belarus and Moscow.

Exports were halted after Belarus began legal action against Russia for failure to pay a new oil transit fee of $US45 per tonne.

The Russian company Transneft said on Monday it was forced to cut supplies after Belarus began siphoning oil from the pipeline as payment in kind for the duties.

The Russian company refuses to pay the oil transit fee as it claims the charge is illegal.

Russia is the world's second-largest oil exporter after Saudi Arabia. Around 1.8 million barrels per day of Urals crude flow via the Druzhba pipeline system, which was built in the 1960s.

European stocks

European Commission officials plan to look at whether EU members will have to draw on strategic stockpiles to ensure their supplies.

Poland reported its oil shipments had stopped overnight. Poland says it has enough oil reserves for 80 days. Germany gets 20 million tonnes a year, or one-fifth of its oil imports, via Druzhba.

It is the latest development in an energy row between Belarus and Moscow, which began when Gazprom forced Belarus to accept an increase in the price of Russian gas.

Belarus was forced on January 1 to agree to pay twice the previous level for natural gas it imports from Russia: $US100 per 1,000 cubic metres of gas compared to $US46 previously. Russia had been pushing for $US105. By comparison, Russia charges European customers over $US250.

Gas supplies to Europe were cut last year in a dispute between Russia and Ukraine.

Source:

http://www.radionz.co.nz/news/latest/200701090713/europe_hit_as_russia_halts_oil_exports_via_belarus