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Last Updated: Tuesday, 9 January 2007, 17:19 GMT
Russia 'forced' into oil shutdown
Workers at refinery in Hungary after Transneft cut oil supplies
Transneft's decision has disrupted oil supplies to central Europe
Russia has said the decision to stop pumping oil through a key pipeline to Europe was forced upon it by events outside of its control.

The comments came as officials from Belarus and Russia began talks aimed at resolving an escalating energy dispute.

Russia has been condemned by the European Union for cutting off its oil supplies without consultation.

German chancellor Angela Merkel dubbed the move "unacceptable" and one that "destroyed trust" in Russia.

Ms Merkel also said the current conflict illustrated that Europe's energy sources should be more diverse.

European Commission President Jose Manuel Barroso had said earlier that energy companies should not be allowed to cut off oil supplies unannounced.

However, Russian Energy Minister Viktor Khristenko said the row with Belarus which led to the pipeline closure constituted a "force majeure" - which means that the events are beyond the country's control and it is free of its obligations.

Supply questions

Russia has accused Minsk of stealing oil and on Monday stopped oil exports to Belarus, a move that, effectively, also halted exports to Germany, Poland and beyond.

It's necessary to secure the interests of Russian companies that have obviously encountered losses
Vladimir Putin

The European Commission is convening its oil supply group on Thursday to discuss the impact of the shut-off, amid reports that some refiners are now being affected.

Meanwhile, Russian president Vladimir Putin has told his government to do everything in its power to protect the interests of its oil customers.

However, he has also warned that the country may have to cut oil output, which some experts suggest to be a sign that he is hoping to force Belarus into a climb down.

"It's necessary to secure the interests of Russian companies that have obviously encountered losses," Mr Putin added.

'No threat'

Despite the pipeline closure, European markets should be able to cope with the drop in exports, the International Energy Agency (IEA), a multilateral energy think-tank said.

The three buzzwords are sustainability, competitiveness and security

European legislation requires member states to hold emergency stocks, which the European Commission said stood at more than 120 days.

The IEA added that even if the shut-off was a prolonged one, refineries "could source crude supplies from alternative routes, and some of them are already organising alternative supplies".

Azerbaijan is also in dispute with Russia and has suspended oil exports to Russia following a pricing dispute with state-backed gas giant Gazprom.

Row deepens

Russia has been pushing prices higher and started to charge duties on its crude oil shipments.

Russia's moves prompted Belarus to impose a transit tax on the Russian oil being shipped through pipelines that crossed its territories.

Belarus then launched a legal action against Transneft when the Russian oil pipeline monopoly refused to pay the charges.

Belarus has said it is ready to negotiate over its decision to introduce a $45 (23) per tonne charge for oil shipped through its territory.

The latest energy wrangle comes almost a year after deliveries of Russian natural gas to much of Western Europe were disrupted during a dispute over pricing between Russia and Ukraine.

The worsening relationship between Russia and Belarus

Russia oil row hits Europe supply
08 Jan 07 |  Business
Russia rues Belarus oil tax move
04 Jan 07 |  Business
Belarus hits Russia with oil tax
03 Jan 07 |  Business

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