Europe caught in middle of Russia-Belarus oil dispute

Russian authorities cut off a major oil pipeline passing through Belarus to Western Europe in a commercial dispute that calls into question Moscow’s reliability as the second-largest oil exporter to the ‘old’ continent.

Russian state operator Transneft said that it was forced to cut off oil supplies transiting via the Druzhba pipeline following accusations that Belarus had siphoned off 79,000 tonnes of oil mainly bound for Polish and German markets.

The Druzhba pipeline, meaning “friendship” in Russian, is the world’s longest and Russia’s principal oil artery to Western Europe.

Energy Commissioner Andris Pieblags said the interruption caused “no immediate risk” to Europe due to sufficient strategic oil reserves but added that he requested “an urgent and detailed explanation” as to the causes of the disruption to the Belarus and Russian authorities.

Poland’s oil reserves can last for 70 days and Germany’s for 130 days, the Commission indicated.

The dispute started in December 2006 after Russia doubled its gas tariffs to Belarus. Minsk retaliated by slapping a tax on Russian oil transiting through its territory, a move condemned by Moscow as illegal.

“This looks like a trade war,” said Russia Deputy Economic and Trade Minister Andrei Sharonov, cited by Interfax news agency.

Piebalgs said on Monday (8 January) that he was considering convening the Oil Supply Group later in the week “to evaluate the impact of the situation and in case the supply disruption causes member states to draw on their strategic stocks”.

The dispute is reminiscent of the Russia-Ukraine gas row of January 2006 which highlighted Europe’s dependency on Moscow for 25% of its overall gas consumption. This time, it is likely to highlight Russia as Europe’s second-largest oil supplier after Saudi Arabia.

It comes as the Commission prepares to unveil a major new initiative on energy in an ambitious package to be presented on Wednesday (10 January).

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