24th May 2019

EU oil crunch damages Russia's reputation

  • A Russian firm has turned off the EU energy tap two winters in a row (Photo: wikipedia)

Russia and Belarus' handling of an oil dispute has damaged their credibility as EU energy suppliers the International Energy Agency (IEA) has warned, after Russia's Transneft admitted on Monday (8 January) afternoon that it cut off supplies to Belarus in a transit tariff row.

The statement by Transneft deputy chief Sergiej Grigoriev to newswire Reuters came after the IEA and the European Commission spent a whole day scrambling around for information on why the 1.8 million barrel a day Druzhba pipeline connecting Russia to Poland, Germany and Slovakia stopped Sunday night.

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"If an energy supplier is going to cut off the power to your house, it's the least you could expect for him to warn you that this is happening and to say the problem will be solved in a couple of days," IEA executive director Claude Mandil told EUobserver. "This lack of information is much worse than the actual disruption in supply."

"I can't believe that nobody in Belarus or Russia stepped forward with an official statement. It's incredible. It makes them look unreliable," he added. "Russia's reliability was already a little shaken when it stopped the flow of gas to Ukraine [in January] last year. Now the same kind of thing is happening again."

"They are simply unreliable and the EU has to be prepared for this," Polish deputy economy minister Piotr Naimski stated. Energy commissioner Andris Piebalgs said "I have contacted Russian and Belarusian authorities calling on them to provide an urgent and detailed explanation of the causes of this."

The oil crunch saw world prices jump $60 cents to $57 a barrel in what the IEA called a "knee-jerk reaction" but Polish, German and Slovak refineries kept working on emergency stocks, with Germany sitting on 130 days' worth of reserves and Poland on 80 days.

"There is no immediate risk," Mr Piebalgs said with 1.8 million barrels a day representing just 2 percent of global oil consumption and with EU and IEA member states keeping up their sleeve "solidarity mechanisms" on sharing stocks if the Russia row drags out.

No love lost between Russia and Belarus

A Belarusian delegation travelled to Moscow on Monday for emergency negotiations, but both sides are talking tough as relations between the old allies sour in a chain of events that began with Russia imposing price hikes on gas exports to Belarus on 1 January.

Russian deputy economics minister Andrei Sharonov told Russian radio that talks with Belarus will only resume in earnest after Minsk drops a new transit tariff of $45 per tonne of oil, adding that Transneft turned off the tap because Minsk was "siphoning off" EU supplies.

A Belarusian diplomat told EUobserver "the problem can be resolved quickly if there is will on the Russian side" while stressing that Belarus transit of Russian gas to the EU is safe despite the oil row.

"It is not in our nature to lead to any escalation in the oil dispute," he explained. "But our country's interests have to be safeguarded."

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