Russia on Friday said its “gas war” with Belarus was over after the neighbors agreed new transit tariffs for Russian gas exports to Europe and Minsk dropped a threat to cut energy supplies to the EU within hours.
A dispute over gas payments and transit debts triggered a four-day stand-off between the former Soviet neighbors and resulted in Russia cutting gas supplies to Belarus on Monday, which in turn halted onward transit to the EU.
An agreement over debts led to the full resumption of supplies to Europe on Thursday, but Belarusian President Alexander Lukashenko briefly raised the stakes on Friday by threatening to cut oil and gas transit unless Moscow paid more.
“I believe that the gas war with Belarus is over,” Gazprom chief executive Alexei Miller told reporters following the Russian gas export monopoly’s annual shareholders’ meeting.
“We have reached an agreement in principal” on a new gas transit tariff, he said. “I do not see any problems or issues that could get in the way of the signing of this amendment.”
Lukashenko on Friday gave Gazprom an ultimatum to pay a debt for gas transit within 24 hours or face a cut in both oil and gas transit to Europe, but Lukashenko’s office later released comments by Deputy Prime Minister Vladimir Semashko saying the two sides had agreed to take two weeks to finalize the exact debt owed by Gazprom and when it would be paid.
“I [will] ask not for two days, but for up to two weeks to solve these issues,” Semashko was quoted as saying.
He said Gazprom officials would travel to Minsk tomorrow for talks.
Russia, the world’s largest energy exporter, supplies Europe with more than 20 percent of its gas needs, with four-fifths of that flowing via Ukraine and one-fifth via Belarus.
Russia triggered the dispute last week when it said Belarus owed it about US$200 million for gas deliveries and started to reduce supplies. Supplies resumed after Minsk paid the bill, but Belarus retaliated by threatening to cut off Russian flows to Europe if Gazprom did not pay more for gas transit.
Gazprom pays transit fees to Belarusian pipeline operator Beltransgaz according to an agreement signed in 2006 and each year the two companies sign an amendment to establish new rates.
This year the two parties have yet to sign the amendment, which contractually allows Gazprom to revert back to the original 2006 prices, Miller said at the briefing on Friday.
Analysts say Lukashenko, who is facing elections next year, wants to exploit every possible opportunity to get a discount for Russian gas and show that he can stand up to Moscow.
“We are not talking about a large sum of money, so it is not really a commercial dispute, instead this is about Lukashenko being as defiant and as problematic as he can,” IHS Global Insight’s head political analyst Lilit Gevorgyan said.
She added: “Hijacking energy destined for the EU to meet political ends” would not sit well in the West.
Lukashenko, who has ruled Belarus since 1994 in what analysts describe as a Soviet authoritarian style, also needs cash to keep raising state wages and pensions, as promised.
Others said Moscow’s move to halt supplies was an attempt to force Belarus into a customs union with Russia and Kazakhstan, a move that Minsk has delayed in hopes of better terms.
Lukashenko also gave refuge to ousted Kyrgyz President Kurmanbek Bakiyev, despite Moscow’s support for the new Kyrgyz leadership.
Relations between the two Slavic nations have also soured over the past year over milk exports and loans, turning Minsk from a close ally into one of the Kremlin’s biggest headaches.
Energy markets have been unmoved by the dispute, in contrast to a gas row between Russia and Ukraine in January last year when prices spiked on supply shortages, tarnishing Russia’s image as a reliable producer and spurring a EU quest for new suppliers.
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