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Oil row highlights changing ties



A cart passes by an oil-pump station, part of the "Druzhba" pipeline at a town of Turov, some 270 km south-west of Minsk, 09 January 2006. Russian Energy Minister Viktor Khristenko on Thursday confirmed that Moscow has cut off oil supplies through the Druzhba pipeline to Belarus and European Union markets.The current oil row follows a New Year's dispute over a more than doubling of Russian gas prices for Belarus, also prompting fears of a knock-on effect for western Europe. -AFP

The outline of this latest dispute between Russia and one of its former satellites appears, on the surface, to be fairly straightforward.

It goes something like this: for 15 years Russia has been supplying oil and gas to its former Soviet brethren at far below market rates.

But these days many of its neighbours are no longer all that friendly to their one-time elder brother. First it was Ukraine, then Georgia and now, it seems, Belarus.

Moscow has decided that its generosity is being abused, and so it is time for the largesse to end. Last winter it imposed large price hikes on natural gas to Ukraine.On the eve of 2007, it became the turn of Belarus to pay a more realistic price.

Deliberate crisis?

Overnight the cost of natural gas to Minsk was nearly doubled.

When it comes to oil, Moscow is even more upset.

It claims the cheap crude it sends to Belarus is being refined there, and then resold as petrol and diesel at market rates. From the Kremlin's point of view, the Belarusian government is enriching itself at Moscow's expense.

So last week the Russian government decided to impose an export tariff on the crude oil it sends to its erstwhile ally.It looks like a harsh way to treat a one-time friend.

But Russia's actions could hardly be described as illegal, or even unjustified.

Even Monday's pipeline shutdown can be explained in a rational way. Russia says Belarus has begun stealing large quantities of oil from the pipeline - nearly 80,000 tonnes in the last few days.

Russia's deputy trade minister described the shutdown as "force-majeure", something Russia is very reluctant to do, but has no other choice.

But looked at it another way, one cannot help feeling there is something very deliberate about the way Russia has precipitated this latest crisis.

Sudden change

Moscow has been supplying cheap energy to Belarus for decades. Why the sudden change of heart now?

Moscow also knows very well that the government of Alexander Lukashenko can ill afford the price hikes Russia has suddenly imposed. The Belarusian economy is in a parlous state.

Without cheap oil and gas, that economy - and the Lukashenko regime - will almost certainly be plunged into crisis.

And that, some in Moscow will tell you, is exactly what the Kremlin wants.That still begs the question - why? Why further jeopardise Russia's own reputation as a reliable partner and energy supplier for the rest of Europe.

Why deliberately destabilise a neighbouring country?

Is it simply that the Kremlin has had enough of its cantankerous and authoritarian neighbour?

Is Moscow just tired of seeing its cheap oil being used to profit a regime that refuses to embrace economic reform and is increasingly unfriendly towards its erstwhile big brother? Or does the Kremlin have bigger political designs upon Belarus?

AP

 

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