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Belarus meets Russia in oil row Merkel attacks Russian oil cuts
(about 2 hours later)
A delegation from Belarus has arrived in Moscow for talks with Russia to resolve a row over oil supplies. Russia's decision to sever oil supplies to Europe was "unacceptable", German Chancellor Angela Merkel has said.
European Commission President Jose Manuel Barroso had said earlier that energy companies should not be allowed to cut off oil supplies unannounced.
Their comments came as a high-level delegation from Belarus arrived in Moscow for talks with Russia aimed at resolving a dispute over oil supplies.
Russia halted oil exports to Belarus on Monday, accusing Minsk of stealing oil.Russia halted oil exports to Belarus on Monday, accusing Minsk of stealing oil.
Meanwhile, the European Union is also set to hold talks with both sides in an effort to resolve the row, which has cut off supplies to much of Europe. Ms Merkel added that cutting supplies without consultation "destroyed trust".
The International Energy Agency (IEA) has said European oil markets will be able to cope with the shutdown as all countries have sufficient stockpiles. The International Energy Agency (IEA) has said European oil markets should be able to cope with the shutdown as all countries have sufficient stockpiles.
Belarus has been in dispute with Russia over the price of Russian oil and gas. It 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".
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. But Moscow has refused to pay, saying the fees are illegal. Azerbaijan also is in dispute with Russia and has suspended oil exports to Russia following a pricing dispute with state-backed gas giant Gazprom.
'No threat''No threat'
The wrangle prompted Russia shut off the transcontinental pipeline through Belarus, halting the flow of oil to Germany, Poland and beyond. Belarus has been rowing with Russia over charges relating to oil and gas.
Despite the cut in supplies the IEA said there was "no threat that product supplies to end users will be disrupted". Russia has been pushing prices higher, and also started to charge duties on its crude oil shipments on the understanding that profits from refined oil should have been shared.
It added that even if the dispute was a prolonged one refineries "could source crude supplies from alternative routes and some of them are already organising alternative supplies". That prompted Belarus to impose a transit tax on oil that was being shipped through pipelines that transited its territories.
Meanwhile, Azerbaijan has suspended oil exports to Russia following a pricing dispute with Russian state-backed gas giant Gazprom. It then launched a legal action against Transneft when the Russian oil pipeline monopoly refused to pay the charges.
Supply worries
German Chancellor Angela Merkel - whose country currently holds the presidency of the EU - is meeting the EU Energy Commissioner in Berlin.
Transneft and the Russian government are looking to face financial losses and damaged reputation Natalia Leschenko, Global Insight Analysis: Russian oil rowTransneft and the Russian government are looking to face financial losses and damaged reputation Natalia Leschenko, Global Insight Analysis: Russian oil row
While Brussels says the Belarus-Russia dispute poses no immediate threat to European oil supplies, Ms Merkel told German TV the row showed the need to diversify energy sources. 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 wrangle prompted Russia to shut off the transcontinental pipeline through Belarus, halting the flow of oil to Germany, Poland and beyond.
German Chancellor Angela Merkel - whose country currently holds the presidency of the EU - is meeting the EU Energy Commissioner in Berlin.
Ms Merkel told German TV the row showed the need to diversify energy sources.
Escalating rows
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 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.
However the current row is resolved, Natalia Leschenko, an analyst at Global Insight, said she expected it to end soon - and at the expense of Russia. However the current row between Moscow and Minsk is resolved, Natalia Leschenko, an analyst at Global Insight, said she expected it to end soon - and at the expense of Russia.
"Transneft and the Russian government are looking to face financial losses and damaged reputation, whereas the outcast status of Belarus in Europe gives it the benefit of invulnerability, which its government uses in full," she said."Transneft and the Russian government are looking to face financial losses and damaged reputation, whereas the outcast status of Belarus in Europe gives it the benefit of invulnerability, which its government uses in full," she said.
Escalating row
The decision to shut down the Druzhba pipeline is the latest twist in an energy row between Belarus and Moscow that began when Gazprom forced Belarus to accept a huge increase in the price of Russian gas.
Russia also started to charge duties on its crude oil shipments - previously duty-free, on the understanding that profits from refined oil should have been shared.
In retaliation, Belarus introduced shipping duties for oil moved through its country, and launched legal action against Transneft when the Russian oil pipeline monopoly refused to pay the charges.
On Monday, Transneft said it had been forced to cut oil supplies through the Druzhba pipeline as Belarus had been siphoning off supplies in payment in kind for the duties.
The 2,500-mile-long pipeline has the capacity to ship more than 1.2 million barrels a day to eastern and central Europe and typically works at close to full capacity.