BELARUS NEWS AND ANALYSIS

DATE:

16/01/2007

Russia May Ship Oil Around Belarus

Now that oil is flowing again, Russia wants to find routes to Europe that avoid the disputed Druzhba pipeline through Belarus. Shipping oil across the Baltic is one option under consideration.

A bitter New Year's spat between Russia and Belarus over the transit of oil saw deliveries to Europe cut for days. Now Moscow is threatening to bypass Belarus completely, in its latest move to show its neighbors who is energy boss.

Moscow has begun "intensive consultations with Transneft," its state-controlled oil monopoly, about sending oil around Belarus and into tankers on the Baltic Sea, Russian Deputy Trade and Economic Development Minister Andrei Sharonov told the Berliner Zeitung on Tuesday. "The debate now is whether to divert oil (for Europe) to the Russian port of Primorsk," he said. "There is that possibility."

Russia is responding to loud international criticism after a dispute between Moscow and Minsk led to a shutdown of oil supplies through the Druzhba ("Friendship") pipeline, which runs through Belarus. The dispute was triggered by a sudden tax on Russian crude bound for Belarus on January 1. Belarus responded by imposing a transit fee of $45 per ton for oil shipped through Druzhba to the European Union. The Russians then cut off supplies to Druzhba -- without warning their European customers.

Germany, Hungary, Poland, the Czech Republic and Slovakia were all affected. German Chancellor Angela Merkel warned Russian President Vladimir Putin that his country's reputation as a reliable energy supplier was at risk. "It is not acceptable to resort to such a policy that destroys trust and erodes trust in building for the future, before actually consulting us or consulting others in any way," Merkel said.

Questions about a secure energy supply will play a central role at a mini-summit in the Russian city of Sochi this weekend, where Merkel will meet Putin in her new position as president of the European Union.

Shutting out traditional friends

The idea of shipping oil around Belarus recalls a deal between Putin's government and Merkel's predecessor, Gerhard Schroeder, to build a pipeline in the Baltic Sea that would divert natural gas around transit nations like Poland, Ukraine and Lithuania.

The bickering between Moscow and its traditional friends in Minsk has tarnished both governments' reputations as energy suppliers. They were "supposed to sit down and play chess," Yulia Latynina, a columnist for the Russian newspaper Novaya Gazeta, told the Los Angeles Times. "But they chose a fistfight instead, and so they both lost."

Post-Soviet republics like Belarus have relied on below-market prices for Russian oil and natural gas to keep their faltering economies running since the Soviet Union toppled in 1991. However Russia has now started raising these prices, to the alarm of the countries in question. Ukraine's protest last year against a sudden hike in the price of natural gas led to a similar shutdown in a pipeline that linked Russian gas fields to Europe.

Source:

http://www.spiegel.de/international/0,1518,459973,00.html

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