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Russia warns of oil supply cut in Eastern Europe

MOSCOW, Dec. 29 (UPI) -- Russia has served notice it may cut its crude oil supplies to Eastern Europe because of Ukrainian demands for higher transit fees, officials said.

The Russian notification about possible disruptions in Russian oil supplies, starting as early as Jan. 1, was followed by comments from Slovak officials, who said they had been informed of a possible disruption.

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Slovak authorities have begun making alternative arrangements for imports of crude oil overland and by rail from sources other than Russia. Similar backup operations are under way in the Czech Republic and Hungary. All three countries have reserves that can last a few months, officials said.

Russian crude oil supplies to Eastern Europe are carried through the Druzhba pipeline, the world's longest, which connects Siberian oil fields with Europe via Ukraine.

Official notifications warning of possible disruptions were sent out by the Russian oil pipeline operation, OAO Transneft.

Slovak Prime Minister Robert Fico told a news conference he had learned that Ukraine had asked for an increase in transit fees as of January 2010. Details of the negotiations over the transit fees were not immediately revealed.

Analysts said the Russian notification could be doubly aimed at the European Union as well as Eastern Europe in preparation for a price increase.

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OAO Transneft has been in dispute with Ukraine's state oil pipeline operator Ukrtransnafta over a number of issues, the transit fees being only one of them.

News of an impending oil supply cut has built up renewed pressure on the European Union as oil supply disruptions most likely would cause widespread hardship in Eastern Europe and lead to pleas for European cash assistance to help countries affected by any supply cuts.

Disagreements between Russia and Ukraine over the oil supplies have lingered since the winter of 2008, when Russia shut down natural gas shipments to Europe via Ukraine.

The Russian action triggered a scramble for alternative energy supply routes between Asia and Europe and gave a boost to international efforts to promote the plan for the Nabucco gas pipeline, bypassing Europe.

Analysts said any disruption in crude oil supplies could not be as serious as last year's gas shutdown, as shippers could organize alternative means of delivery.

Czech officials said they could switch to alternative sources of crude oil via Italy, where oil imported from the Gulf region may be available to meet emergencies. Czech demand for crude oil can be met via the IKL pipeline, which connects Czech oil processing plants with the Italian Adriatic port of Trieste.

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Hungarian oil industry sources said the country's crude oil reserves would be good for about three months.

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