RUSSIAN OIL continues to flow to Belarus and via Belarus to the European Union despite a failure by Moscow and Minsk to clinch a new oil supply deal at talks on Saturday, a Russian energy ministry spokeswoman said yesterday.

“Belarus is holding back the negotiation process. Russia has made unprecedented . . . proposals about duty-free oil supplies . . . But Belarus is demanding more,” spokeswoman Irina Yesipova said. She said she didn’t know if talks would resume on Sunday or next week.

On Saturday, Belarus’s delegation left Moscow, and Minsk accused Russia of ignoring its arguments in a development that will revive fears of supply cuts to Europe.

Talks have repeatedly broken down over the New Year period, resulting in a brief interruption in supplies to Belarussian refineries.

Europe, mindful of a dispute in 2007 that cut about a million barrels per day of Russian oil supplies via Belarus, are keen the ex-Soviet states resolve their differences. The latest dispute, which centres on the tariffs Belarus must pay for Russian oil, has yet to affect supplies to Europe, but it was a contributing factor to oils push to a 15-month high above $83 a barrel during the past week.

Russia says it wants simply to bring energy prices and transit fees into line with the market after subsidising its neighbours for many years with preferential terms. Much of its oil and gas must cross Ukraine and Belarus to reach Europe.

Russia allowed Belarus to import about 20 million tonnes of oil last year at only 35.6 per cent of the current crude export tariff. Russia has said Belarus can now buy only six million tonnes of Russian oil, for domestic needs only, duty-free. – (Reuters)