Russia-Belarus oil row continues

Jan. 4, 2010 at 12:53 PM
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MOSCOW, Jan. 4 (UPI) -- Russia has apparently restarted oil deliveries to refineries in Belarus, but the row over 2010 pricing continues.

"We yesterday started shipments to Belarusian refineries," Russian Deputy Prime Minister Igor Sechin was quoted as saying by Russian news agency Interfax. "We are continuing uninterrupted transit to Western European customers."

The overall conflict between Russia and Belarus over oil supplies in 2010 has not been resolved, however.

Both governments had wanted to strike a deal over 2010 oil deliveries by the end of 2009. When such did not materialize, Russia, in a move that has been forthcoming the past few years, stopped the oil flow to Belarus.

The Kremlin has always underlined that oil deliveries to Europe wouldn't be affected. Russian Prime Minister Vladimir Putin added that he hoped to strike a deal as soon as possible.

Belarus called the Russian price hike unfair; Russia says Belarus wants to resell Russian gas tax-free.

In a bid to pressure Russia, Belarus state power firm Belenergo has threatened to cut electricity to the Russian enclave of Kaliningrad.

The Belarusian leadership has also threatened to increase transit fees for Russian oil. Most of the oil flowing to Belarus is refined and resold to the West, with the majority reaching Poland and Germany.

Belarus has in the past years profited from energy prices below free-market levels. Russia has also given the country multibillion-dollar loans to help it survive the economic crisis.

A row with Russia in 2007 temporarily halted oil deliveries to Belarus, affecting supplies for Europe.

Russia has clashed with transit countries several times during the past years.

Europe in January battled its worst energy crisis in more than three decades when a dispute between Russia and Ukraine halted gas supplies to Europe during a bitter cold spell, leaving several countries in Central and Eastern Europe without adequate heating supplies.

Ukraine is an important gas hub for Europe -- around one-fifth of the continent's gas supplies arrive via Ukrainian pipelines. However, internal power struggles have undermined Ukraine's supply reliability.

Relations between Kiev and Moscow first turned sour in early 2006, when Russia temporarily shut down Ukraine's gas supply until Kiev agreed to pay higher prices. The crisis lifted the issue of energy security near the top of the European agenda, with Western leaders scrambling to diversify energy import sources.

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