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Russia oil row hits Europe supply Russia oil row hits Europe supply
(20 minutes later)
Belarus has halted Russian oil supplies to Poland, Germany and Ukraine after a trade row with Moscow escalated. Russian oil supplies to Poland, Germany and Ukraine have been cut amid a trade row between Belarus and Moscow.
Disruptions hit Transneft's Druzhba pipeline overnight before supplies were severed completely at Poland's border with Belarus, Polish officials said. Transneft's Druzhba pipeline were completely shut down at Poland's border with Belarus, Polish officials said.
The problems arose after Belarus began legal action against Transneft for failure to pay a new oil shipment tax on oil supplies piped through Belarus. The European Commission said the cuts posed no immediate risk to European supplies but it was seeking an urgent explanation from Belarus and Russia.
It signals the latest twist in an energy row between Belarus and Moscow. Exports were halted after Belarus began legal action against Russia for failure to pay a new oil shipment tax.
The dispute began after Russian energy giant Gazprom forced Belarus to accept a huge increase in the price of Russian gas. Transneft later said it had been forced to cut off supplies through the Druzhba pipeline after Belarus began siphoning off oil as payment in kind for the duties.
Russia has called for an end to the oil shipment tax, saying it threatens supplies to Europe. The Russian firm has so far refused to pay the oil export taxes as it claims the charges are illegal.
Supplies interrupted Stockpile concerns
The European Commission confirmed the interruption of oil through the Przyjazn pipeline in Poland and is investigating whether the cut has had impact in the other branch of the pipeline that goes to Slovakia and south-east Europe. The European Commission confirmed the supplies through the Polish part of the pipeline had been cut, adding it was investigating whether the move would have an impact on the other branch of the pipeline that goes to Slovakia and south-east Europe.
"I have also contacted our Russian and Belarussian authorities calling on them to provide an urgent and detailed explanation of the causes of this disruption," said European Energy Commissioner Andris Piebalgs. "I have also contacted our Russian and Belarusian authorities calling on them to provide an urgent and detailed explanation of the causes of this disruption," said European Energy Commissioner Andris Piebalgs.
He added that there was no immediate risk to the supply of oil to the EU, but was considering convening the Oil Supply Group later this week to evaluate the impact of the situation and the possibility that EU members may have to draw on strategic stocks. Commission officials plan to look at whether European Union members will have to draw on strategic stockpiles to ensure their supplies, he added.
Every day Russia transports about a fifth of its oil exports - or one million barrels - through Belarus, mainly to refiners in Poland and Germany. Poland's deputy economy minister Piotr Nalmski said his country had enough oil reserves for 80 days, but he attacked the decision to halt exports.
'Halted overnight'
The disruption is a key factor driving oil prices towards $57-a-barrel
"Oil supplies via the Druzhba pipeline to Poland and Germany were halted overnight. We sent a letter to Belarus asking for explanations," said Tomasz Zakrzewski, a spokesman for Polish pipeline operator PERN.
Poland's deputy economy minister, Piotr Nalmski, said that the supply problems were a result of the trade row, while adding that the country had sufficient oil reserves for 80 days.
"This shows us once again that arguments among various countries of the former Soviet Union, between suppliers and transit countries, mean that these deliveries are unreliable," he told the BBC."This shows us once again that arguments among various countries of the former Soviet Union, between suppliers and transit countries, mean that these deliveries are unreliable," he told the BBC.
Germany said supplies to its Leuna and Schwedt refineries in eastern Germany had also been halted. Meanwhile, German economy minister Michael Glos said he viewed the pipeline closure with concern and called on Russia and Belarus to meet their energy transit and delivery responsibilities "as soon as possible".
Michael Glos, German Economy Minister, said he viewed the pipeline closure with concern and called on Russia and Belarus to meet their energy transit and delivery responsibilities. Officials in Minsk declined to comment on the situation, saying all questions should be directed to Transneft.
"I expect the deliveries through the pipeline to resume completely as soon as possible," he said. Row intensifies
However, officials in Minsk declined to comment on the situation, saying all questions should be directed to Transneft. The decision to shut down the Druzhba pipeline is the latest twist in an energy row between Belarus and Moscow which began when Russian energy giant Gazprom forced Belarus to accept a huge increase in the price of Russian gas.
Meanwhile, Transneft said it was doing all it could to boost supplies from via other routes.
Relations sour
Further reports suggested that the company had also accused Belarus of siphoning off Russian oil destined for Europe from the pipeline.
The cut off in oil supplies is the latest twist in a row between Moscow and Minsk over energy prices.
Last week Belarus said it would charge Russia $45 (£23) per tonne of oil that passed through its country.Last week Belarus said it would charge Russia $45 (£23) per tonne of oil that passed through its country.
The tit-for-tat tax move was introduced by the Belarusian government days after the country was forced to accept a doubling of Russian gas charges - from $47 to $100 - when Moscow threatened to cut supplies if Belarus refused to agree new prices. News of the disruption to supplies was a key factor helping to drive oil prices through the $57-a-barrel barrier after falling to around the $55 level last week.
News of the disruption to supplies was a key factor helping to drive oil prices closer to the $57-a-barrel mark on Monday after falling to around the $55 level last week. US light sweet crude rose 89 cents to $57.20 in New York trade, while in the UK Brent crude stood at $56.71 - up $1.08.
US light sweet crude rose 60 cents to $56.91 a barrel in early trade, while in the UK Brent crude stood at $56.43 - up 79 cents. News that Saudi Arabia, the world's largest oil producer, planned to cut output by 158,000 barrels a day also helped to drive crude prices higher.
News that Saudi Arabia, the world's largest oil producer, planned to cut output also helped to drive crude prices higher.
Saudi Arabia said it would cut output by 158,000 barrels a day from 1 February - in line with the latest production cuts set out by oil cartel Opec in an effort to boost prices.