Russia, Belarus still disagree on oil

Two days of talks between Russia and Belarus on resolving an oil spat that had raised the prospect of disruptions to the EU have ended with no result.

Russia, Belarus still disagree on oil

Two days of talks between Russia and Belarus on resolving an oil spat that had raised the prospect of disruptions to the European Union have ended with no result, both sides said on Thursday, leaving tensions high.

Russia briefly cut crude supplies this month to Belarussian refineries after failing to agree oil price terms for this year. The dispute helped to push U.S. crude to the highest close in 15 months on Tuesday.

A Belarussian source close to the talks in Moscow told Reuters that negotiations had stalled and his country's delegation were heading home to Minsk.

"Neither side was able to bring their position closer together despite the fact that the Belarussian side was ready for a compromise," the source said.

Russia was more upbeat after talks between the two ex-Soviet neighbours ended.

Energy Ministry spokeswoman Irina Yesipova said the Belarussian delegation were indeed headed home but that "both sides came closer to an agreement."

"We are in constant contact with the Belarussians on the issue," she said by telephone late on Thursday.

The dispute centres on how much export duty Belarus should pay to Russia for supplies which are then refined and exported to the West, a pillar for the $50 billion Belarussian economy.

Last year, Russia allowed Belarus to import oil at just 35.6 percent of the current crude export tariff. Moscow now wants Belarus to pay full duties on the crude.

Russian Prime Minister Vladimir Putin has said Belarus can buy 6 million tonnes of oil this year for domestic needs without paying duties.

But that leaves another 14.5 million tonnes of crude a year that Moscow says Belarus should pay at least the full $267 a tonne duty on, which would mean potential additional annual payments for the Belarussian economy of at least $2.5 billion.

Russia has repeatedly clashed with its neighbours over energy pricing in recent years, leading politicians from the EU and the United States to accuse Russia of using its vast energy resources to brings its neighbours to heel, though Moscow says it is simply trying to bring in market pricing.

A dispute with Ukraine last winter left EU customers without gas for almost two weeks at the height of winter, severely straining ties with the European Union.

Reuters
Last Mod: 07 Ocak 2010, 22:30
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