Belarus cuts off Russian oil to Europe

For the second time in just over a year, a political squabble between Russia and one of its ex-Soviet neighbors has cut off energy supplies to Europe, triggering anxieties about Moscow's reliability as an economic partner.

On Monday, Russia accused Belarus of shutting down the northern leg of the 2,500-mile-long Druzhba pipeline, which carries up to 2 million barrels of Siberian crude daily to European customers, causing shortages in Poland, Germany, and Lithuania.

The disruption is reminiscent of last year's shutdown of Russian gas supplies to Ukraine, which caused similar energy jitters in Europe. Though Poland and Germany have ample reserves on hand to ride out any temporary squeeze, the dispute underscores increasing concerns about Europe's dependency on Russian energy.

German Chancellor Angela Merkel, whose country assumed the EU and G-8 presidencies on Jan. 1, worried in a weekend TV interview about Moscow's tendency to change prices – and rules – for EU countries that depend on Russia for about a third of their energy supplies.

"Russia was a dependable delivery partner in the past," said Mrs. Merkel, who has made energy security a key priority of Germany's G-8 presidency. "But we are wrestling with Russia right now about strengthening [its energy commitments]. We also need to know that we have reliable prices and reliable cooperation with Russia."

The most recent energy scare, which comes amid a deepening rift between the Kremlin and Belarussian leader Alexander Lukashenko over long-stalled plans to reunify the two former Soviet nations, is the latest in a chain of tit-for-tat measures. On Dec. 31, Belarus reluctantly agreed to a doubling in price of Russian gas, to $100 per thousand cubic meters – still well below global market levels of around $250. Belarus also agreed to sell 50 percent of its pipeline network, Beltransgaz, to Russia's gas monopoly Gazprom.

But last week Belarus retaliated by imposing a special $45 transit duty on each metric ton of Russian crude pumped through the Druzhba pipeline, a move Russia has called "illegal." By Monday, Polish officials said no oil was flowing through the line, which carries about a fifth of all Russian crude exports to Europe. Russia accused Belarus of "siphoning the oil off" to meet its own energy needs.

Monday Germany shut down two refineries, in Leuna and Schwedt, though both it and Poland have enough reserves on hand to last at least two months.

"[Europe] is not at any kind of chokepoint, the market can cover a great deal of this if needed," says Ambassador William Ramsay, deputy executive director of the International Energy Agency in Paris. "[there are] a lot of other options to procure energy and gas, by ship and pipeline."

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