Russian Oil Again Flows through Belarus

Oil began flowing again through the Druzhba pipeline to Western European countries yesterday following the resolution of a price dispute between Russia and Belarus, Russian state-owned pipeline firm Transneft said.

The Czech Republic, Germany, Hungary, Poland, Slovakia and Ukraine began receiving Russian shipments via Druzhba yesterday, said pipeline company Gomeltransneft-Druzhba general director Alexei Kostuchenko (AP/Houston Chronicle, Jan. 10).

The Druzhba pipeline, the world's longest at 2,500 miles, halted oil shipments at the Belarusian border Monday, a week after Belarus reluctantly agreed to double the price it pays for Russian natural gas from $46 per 1,000 cubic meters to $100. It was not clear which country initiated the shutdown, but Transneft accused Belarus of siphoning at least 79,000 tons of oil meant for other countries from the pipeline, which it said started Saturday. The pipeline usually operates close to its full capacity of more than 1.2 million barrels per day.

In response to the hike, Belarus imposed a $45-per-metric-ton tariff for allowing Russia to send oil and natural gas through the country to several E.U. member states. Yesterday, Belarus agreed to lift its demand that Russia pay transit fees on oil exports (Greenwire, Jan. 10).

Belarusian Prime Minister Sergei Sidorsky will finalize the resolution today with Moscow, which is also demanding that Belarus return the 79,000 tons of oil to European customers. According to business daily Vedomosti, the two countries could revert to a 1990s-era pricing arrangement in which Belarus paid Russia part of the duties it received from exporting oil to Europe.

Russian Deputy Economic Development Minister Andrei Sharonov said Moscow would consider diversifying its energy export routes, as "the situation with Belarus showed the vulnerability of Russian contracts" (Nick Coleman, Agence France-Presse).

German officials said they would pursue discussions with Russia to prevent the situation from recurring, as it did last January when Russia cut off natural gas shipments to Ukraine in another pricing dispute.

"I expect that in the future European customers, who must be able to rely on their long-term supply contracts, will not have to bear the burden of disagreements between supply and transit countries," said German Energy Minister Michael Glos. "In addition, we expect timely consultations if problems should arise again.

"The clear and unanimous position of the E.U. Commission and the E.U. presidency as well as the solidarity of the E.U. member states surely contributed to the quick resumption of supplies, regardless of the differences between Belarus and Russia," he added (Agence France-Presse).

Copyright 2007 Greenwire. All Rights Reserved. Visit Greenwire for a free trial.