Russia stops oil supplies to Belarus after no deal signed

Minsk, Jan 3 (AFP) Russia has stopped shipping oil to Belarus, the Belarusian state energy firm said on Friday, after the two countries failed to reach a deal on supplies by a January 1 deadline. Moscow said oil flow through Belarus -- a key transit route for Russian oil and gas to Europe -- was continuing. But a dragged-out dispute could threaten supplies.

Belneftekhim said in a statement that loading to Belarus's two oil refineries had been reduced to a technical minimum after supplies from Russia were halted. "Work is ongoing on concluding the January contracts," said the statement, quoted by state media.

The ex-Soviet neighbours have a long history of energy disputes and complicated bilateral ties, with Belarusian President Alexander Lukashenko running hot and cold on Moscow's push for a closer trade and political union. A previous deal on oil prices, transit fees and volumes expired on December 31.

Lukashenko and Russian President Vladimir Putin held a series of calls ahead of the deadline but without apparent progress. The deliveries are crucial for Belarus. The country buys about 24 million tons of oil from Russia every year, with about six million for its own needs and the rest exported.

But the main international concern of the lack of a deal will be the potential impact on the Druzhba pipeline, which runs from western Russia through Belarus and Ukraine to Europe. Druzhba is one of the biggest crude pipelines in the world and a major source of supplies to Germany, Poland and other countries.

A spokesman for Russia's pipeline monopoly Transneft told Russian news agencies that the company had received no requests for deliveries to Belarusian refineries since January 1. "At the same time, oil transit through Belarus is continuing in full," the spokesman, Igor Demin, said. (AFP) IND