BELARUS NEWS AND ANALYSIS

DATE:

08/01/2007

Price Row Disrupts Russian Oil Exports Through Belarus

By Bill Gasperini

Moscow

Russian crude oil exports through neighboring Belarus to western Europe have been cut in the wake of a trade dispute. Bill Gasperini reports for VOA from Moscow, the development highlights Europe's vulnerability to problems between Russia and its ex-Soviet neighbors.

Russia and Belarus blamed each other for the halt in crude oil deliveries that primarily affects Poland and Germany.

Belarusian officials say Russia's Transneft oil export firm cut the flow of oil in the Druzhba, or "Friendship", pipeline that runs through its territory.

Russia says Belarus provoked the disruption by illegally siphoning off oil that was supposed to go to Europe.

The president of Russia's Transneft firm, Semyon Vainshtok, says that clients in the west have been affected by actions taken in Belarus, and that the company is seeing what it can do about the situation.

Officials at Belarus' state oil firm say they are "reducing" some of the oil exported. They say withholding the oil is a form of payment for a new tax Belarus has placed on Russian oil exported to the west through the pipeline.

The tax was imposed after Belarus reluctantly signed a deal on New Year's Eve in which it agreed to pay double for the natural gas it imports from Russia, even though the new price is still far below world levels.

Late Monday, Belarus announced it is sending a delegation to Moscow for talks aimed at resolving this latest round in the energy dispute.

In Brussels, the European Commission said there was no immediate threat to oil supplies, because Poland and Germany have sufficient reserves.

But German Economy Minister Michael Glos said the incident showed that a "one-sided dependency on energy supplies must not be allowed to develop."

Meanwhile, the world oil price rose to $57 a barrel, and Polish officials suggested that Russia might be withholding exports to weaken Belarus.

Until now, Russia had not responded to the new Belarusian tax of $45 per ton of oil, a considerable sum given that Russia sends 100 million tons through Belarus each year.

The dispute has severely strained relations between the two countries that have long been considered close allies.

Source:

http://voanews.com/english/2007-01-08-voa28.cfm