Russian-Belarus energy dispute on the table

Russia has cut oil supplies to neighbouring Belarus in a dispute over tariffs, raising new concerns across Europe about the increasing dependence on Russian energy and the consequent political influence of the Kremlin.

Russia has halted deliveries in Belarus on New Year’s Eve and a new round of negotiations this weekend between the two sides failed to reach an agreement on prices for the coming year. Belarus yesterday accused Russia of exerting “unacceptable” and “unprecedented” pressure in the talks, and said Moscow’s demands undermined attempts at closer economic integration between the two ex-Soviet neighbours.

Meanwhile, Belarus ships 400,000bpd of oil westwards via Russia’s Druzhba pipeline, with Germany and Poland as key customers. The country has threatened to increase the transit fee it charges Russia to ship its oil in retaliation for cutting off its own supplies.

Most of the oil Belarus imports from Russia is refined and shipped to Europe. However, its refineries have a week’s worth of stockpiles so there has been no immediate effect of the dispute, according to reports in the Guardian newspaper. European countries are likely to suffer oil shortages as a result of the dispute as they will be able to buy in oil from other suppliers although it would be a more expensive option.

Disputes over energy supplies between Russia and its neighbours are not a new phenomenon and have raised the stakes for European energy security. Last year, Russia cut off gas supplies to the Ukraine, which in terms halted shipments to the rest of Europe. Wholesale gas prices skyrocketed and households in Eastern Europe went without heating for days during winter.

Reported by Guardian, UK.