Russia resumes oil flow to Belarus, Europe

Jan. 11, 2007
Russia resumed delivering crude oil to Europe via Belarus on Jan. 11, ending a 3-day suspension of supplies along the Friendship pipeline that affected Germany, Poland, Slovakia, and Hungary.

Eric Watkins
Senior Correspondent

LOS ANGELES, Jan. 11 -- Russia resumed delivering crude oil to Europe via Belarus on Jan. 11, ending a 3-day suspension of supplies along the Friendship pipeline that affected Germany, Poland, Slovakia, and Hungary.

The Jan. 8 disruption followed Russia's decision last month to impose a duty of $180/tonne on oil exports to Belarus, which responded by slapping its own $45/tonne transit tax on Russian oil.

As the European Union, members of which are highly dependent on Russia for oil and natural gas, voiced alarm over the reliability of supplies along the pipeline, Russian President Vladimir Putin and Belarusan President Alexander Lukashenko held talks by telephone on Jan. 10.

No details of their agreement have emerged, but the Belarus government later cancelled its $45/tonne duty on Russian oil, and its prime minister, Sergei Sidorsky, flew Jan. 11 to Moscow for meetings with his Russian counterpart.

German Foreign Minister Frank-Walter Steinmeier expressed satisfaction that Russia heeded the EU's appeal to find a quick and constructive solution to the dispute, but he stressed the need for Russia to establish future energy relations on a reliable, enduring basis.

That view was echoed by Deutsche UFG analysts, who advised investors that "the disruptions in oil supplies have yet again undermined Russia's efforts to establish itself as a reliable source of fuel supplies to Europe."

The disruption along the Friendship line came a year after a Russian dispute with Ukraine that disrupted Europe's gas supply briefly last winter. EU countries in aggregate depend on Russia for around 25% of their oil and more than 40% of their natural gas.

Contact Eric Watkins at [email protected].