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Russian oil blockade of Belarus continues for a third day

Russia's main oil export pipeline to Europe remained closed for a third day as the world's second-largest producer of crude failed to reach an agreement with Belarus in a dispute over oil duties.

OAO Transneft, Russia's state-run pipeline operator, is still not sending oil through Belarus, Sergei Grigoryev, the company's deputy chief executive, said by phone today. Transneft shut down the Druzhba pipeline to Europe on January 8 after claiming that Belarus was stealing crude.
The cutoff halted deliveries to Poland and Germany, followed by Slovakia, the Czech Republic and Hungary. While the countries have adequate stockpiles to avoid shortfalls, concern is rising in Europe about the reliability of Russia as an energy supplier, especially since Russian natural-gas supplies to the region were cut in a similar pricing dispute with Ukraine a year ago.

„Nothing has changed,” said Grigoryev. „We're dealing with the problem through all available means.” He said Transneft was redirecting the 1.4 million barrels per day that usually flow through the Druzhba, or Friendship, pipeline to storage tanks, refineries and alternative export hubs like Primorsk port on the Baltic Sea. Talks between the two countries continued until midnight yesterday, said Russian Economy Ministry spokeswoman Alla Borisenkova. „We're waiting for the start of consultations,” she said. Belarusian Deputy Prime Minister Andrei Kobyakov, the nation's chief negotiator, is still in Moscow, Alexander Timoshenko, a government spokesman, said by phone from Minsk today.

Russia in December imposed a duty of $180 a ton (about $24.50 a barrel) on crude exports to Belarus, complaining that its former Soviet partner was buying crude at Russian domestic prices and reselling refined products on world markets. Belarus retaliated by slapping a transit tax on Transneft of $45 per ton of crude shipped through Druzhba. Transneft shut off deliveries after saying Belarus had siphoned off oil as payment in kind for the transit tax. (Bloomberg)