BELARUS NEWS AND ANALYSIS

DATE:

11/01/2010

No halt to Russian oil flow to Belarus

RUSSIAN oil continues to flow to Belarus and via Belarus to the European Union despite a failure by Moscow and Minsk to clinch a new oil supply deal during talks on Saturday, a Russian Energy Ministry spokeswoman said yesterday.

"Belarus is holding back the negotiation process. Russia has made unprecedented and very comfortable proposals about duty-free oil supplies ... But Belarus is demanding more," Energy Ministry spokeswoman Irina Yesipova told Reuters yesterday.

She said she didn't know if talks would resume yesterday or this week.

On Saturday, Belarus' delegation left Moscow, and Minsk accused Russia of ignoring its arguments in a development that will revive fears of supply cuts to Europe, which have already pushed oil prices up.

Talks have repeatedly broken down over the New Year period, resulting in a brief interruption in supplies to Belarussian refineries.

Europe, mindful of a dispute in 2007 that cut around a million barrels per day of Russian oil supplies via Belarus, is keen for the ex-Soviet states to resolve their differences.

The latest dispute, which centers on the tariffs Belarus must pay for Russian oil, has yet to affect supplies to Europe, but it was a contributing factor to oil's push to a 15-month high above US$83 a barrel during the past week.

Russia has repeatedly clashed with ex-Soviet states over energy pricing in recent years, prompting politicians from the EU and the United States to accuse the Kremlin of using its energy might to bring its neighbors to heel.

Russia says it wants simply to bring energy prices and transit fees into line with the market after subsidizing its neighbors for many years with preferential terms. Much of its oil and gas must cross Ukraine and Belarus to reach Europe.

Russia allowed Belarus to import around 20 million tons of oil last year at only 35.6 percent of the current crude export tariff. Russia has said Belarus can now buy only 6 million tons of Russian oil, for domestic needs only, duty-free.

While Minsk argues all Russian oil should be duty-free, Moscow now wants payment in full for about 14.5 million tons a year of crude that is mostly refined and re-exported.

Germany and Poland would be worst affected should the dispute affect transit supplies to Europe.

Source:

http://english.eastday.com/e/100111/u1a4942649.html


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