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The Russia–Belarus energy dispute began when
Russia Russia, or the Russian Federation, is a country spanning Eastern Europe and North Asia. It is the list of countries and dependencies by area, largest country in the world, and extends across Time in Russia, eleven time zones, sharing Borders ...
n
state-owned State ownership, also called public ownership or government ownership, is the ownership of an industry, asset, property, or enterprise by the national government of a country or state, or a public body representing a community, as opposed to ...
gas supplier
Gazprom PJSC Gazprom ( rus, Газпром, , ɡɐsˈprom) is a Russian State-owned enterprise, majority state-owned multinational Energy industry, energy corporation headquartered in the Lakhta Center in Saint Petersburg. The Gazprom name is a contract ...
demanded an increase in gas prices paid by
Belarus Belarus, officially the Republic of Belarus, is a landlocked country in Eastern Europe. It is bordered by Russia to the east and northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Belarus spans an a ...
, a country which has been closely allied with Moscow and forms a loose
union state The Union State is a supranational union consisting of Belarus and Russia, with the stated aim of deepening the relationship between the two states through integration in economic and defence policy. Originally, the Union State aimed to crea ...
with Russia. It escalated on 8 January 2007, when the Russian state-owned pipeline company Transneft stopped pumping oil into the Druzhba pipeline which runs through
Belarus Belarus, officially the Republic of Belarus, is a landlocked country in Eastern Europe. It is bordered by Russia to the east and northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Belarus spans an a ...
because Belarus was siphoning the oil off the pipe without mutual agreement. On 10 January, Transneft resumed oil exports through the pipeline after Belarus ended the tariff that sparked the shutdown, despite differing messages from the parties on the state of negotiations. The Druzhba pipeline, the world's longest, supplies around 20% of Germany's oil. It also supplies oil to
Poland Poland, officially the Republic of Poland, is a country in Central Europe. It extends from the Baltic Sea in the north to the Sudetes and Carpathian Mountains in the south, bordered by Lithuania and Russia to the northeast, Belarus and Ukrai ...
,
Ukraine Ukraine is a country in Eastern Europe. It is the List of European countries by area, second-largest country in Europe after Russia, which Russia–Ukraine border, borders it to the east and northeast. Ukraine also borders Belarus to the nor ...
,
Slovakia Slovakia, officially the Slovak Republic, is a landlocked country in Central Europe. It is bordered by Poland to the north, Ukraine to the east, Hungary to the south, Austria to the west, and the Czech Republic to the northwest. Slovakia's m ...
, the
Czech Republic The Czech Republic, also known as Czechia, and historically known as Bohemia, is a landlocked country in Central Europe. The country is bordered by Austria to the south, Germany to the west, Poland to the northeast, and Slovakia to the south ...
, and
Hungary Hungary is a landlocked country in Central Europe. Spanning much of the Pannonian Basin, Carpathian Basin, it is bordered by Slovakia to the north, Ukraine to the northeast, Romania to the east and southeast, Serbia to the south, Croatia and ...
.


Background

For a long time, the gas price for most of the former USSR republics was significantly lower than for the Western European countries. In 2006, Belarus paid only $46 per 1000 m3, a fraction compared to $290 per 1000 m3 paid by Germany. The annual Russian subsidies to the Belarusian economy were around $4 billion, as Russian president
Vladimir Putin Vladimir Vladimirovich Putin (born 7 October 1952) is a Russian politician and former intelligence officer who has served as President of Russia since 2012, having previously served from 2000 to 2008. Putin also served as Prime Minister of Ru ...
said on 9 January 2007. In 2006, Russia announced a higher price for 2007. After
Alexander Lukashenko Alexander Grigoryevich Lukashenko (also transliterated as Alyaksandr Ryhoravich Lukashenka; born 30 August 1954) is a Belarusian politician who has been the first and only president of Belarus since the office's establishment in 1994, making hi ...
, President of Belarus, rejected this price change, and without a new treaty, Gazprom threatened to cut gas supplies to
Belarus Belarus, officially the Republic of Belarus, is a landlocked country in Eastern Europe. It is bordered by Russia to the east and northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Belarus spans an a ...
from 10:00 MSK on 1 January 2007. Both sides finally agreed on the following terms: *Russian gas to be sold to Belarus for $100 per 1000 m3 (compared to Gazprom's original request of $200 per 1000 m3) *Belarus to sell Gazprom 50% of its national gas supplier Beltransgaz for the maximal price of $2.5 billion *Gas prices for Belarus to gradually rise to the European market price by 2011 *Belarus's transit fees for Russian gas to increase by around 70% Another part of the energy dispute is the dispute over oil. In 1995, Russia and Belarus agreed that no customs would be imposed on oil exported to Belarus. In exchange, the revenues from this oil processed in Belarus would be shared by 15% for Belarus and 85% for Russia. In 2001, Belarus unilaterally canceled this agreement while Russia continued its duty-free exports. Lukashenko's state kept all the revenues, and many Russian oil companies moved their processing capacities to Belarus. On this arrangement, Russia also lost billions of dollars annually. Belarus imposed a tariff of US$45 per ton of oil flowing through the Druzhba pipeline, prompting Russia to claim that the move was illegal and to threaten retaliation, since it contradicts bilateral trade agreements and worldwide practice. Only imported or exported goods are being tariffed while transit goods are not objects of tariffing. Russia rejected paying the newly imposed Belarusian tariffs. In compensation, Belarus began siphoning off oil from the pipeline. According to Semyon Vainshtok, the head of Russia's pipeline monopoly Transneft, Belarus had siphoned off 79,900 metric tons of oil since 6 January. Vainshtok said this was illegal and the move was made "without warning anyone". In response, Russia stopped oil transport on 8 January. A Belarusian team led by Vice-Premier Andrei Kobyakov flew to
Moscow Moscow is the Capital city, capital and List of cities and towns in Russia by population, largest city of Russia, standing on the Moskva (river), Moskva River in Central Russia. It has a population estimated at over 13 million residents with ...
on 9 January to pursue a solution but initially reported that they had not been able to start negotiations. On 10 January, the Belarusian government lifted the tariff, and Russia agreed to start negotiations. The oil flow was resumed at 05:30 GMT on 11 January. In the wake of the dispute, Gazprom acquired 50% stake in the Belarusian gas pipeline operator Beltransgaz for US$2.5 Billion.


August 2007 developments

Following the alleged violation of previous agreements and the failure of negotiations, on 1 August 2007,
Gazprom PJSC Gazprom ( rus, Газпром, , ɡɐsˈprom) is a Russian State-owned enterprise, majority state-owned multinational Energy industry, energy corporation headquartered in the Lakhta Center in Saint Petersburg. The Gazprom name is a contract ...
announced that it would cut gas supplies to
Belarus Belarus, officially the Republic of Belarus, is a landlocked country in Eastern Europe. It is bordered by Russia to the east and northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Belarus spans an a ...
by 45% from 3 August over a $456 million debt. Talks are continuing and Belarus has asked for more time to pay. Although the revived dispute is not expected to hit supplies to Europe, the
European Commission The European Commission (EC) is the primary Executive (government), executive arm of the European Union (EU). It operates as a cabinet government, with a number of European Commissioner, members of the Commission (directorial system, informall ...
is said to view the situation 'very seriously'. Following overnight negotiations in Moscow, on 3 August, $190 million of the debt was repaid, and Belarus was given a further week to pay the remainder or face a 30% cut in supplies. As of 8 August, Belarus has fully paid its $460 million debt for Russian natural gas supplies, ending a dispute between the country and Gazprom TS: GAZP


Related disputes

The situation is reminiscent of other recent price tensions between Russia, one of the world's energy superpowers, and other states since the start of 2005. These have resulted in increases in the prices paid for gas by
Moldova Moldova, officially the Republic of Moldova, is a Landlocked country, landlocked country in Eastern Europe, with an area of and population of 2.42 million. Moldova is bordered by Romania to the west and Ukraine to the north, east, and south. ...
(now paying US$170 per 1,000 cubic meter),
Georgia Georgia most commonly refers to: * Georgia (country), a country in the South Caucasus * Georgia (U.S. state), a state in the southeastern United States Georgia may also refer to: People and fictional characters * Georgia (name), a list of pe ...
(US$235 per 1,000 cubic meter) and
Ukraine Ukraine is a country in Eastern Europe. It is the List of European countries by area, second-largest country in Europe after Russia, which Russia–Ukraine border, borders it to the east and northeast. Ukraine also borders Belarus to the nor ...
(following the 2006 Russia-Ukraine gas dispute, which also resulted in a 4-day cut to
Europe Europe is a continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere. It is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the west, the Mediterranean Sea to the south, and Asia to the east ...
an gas supplies)., with Azerbaijan having recently stopped oil exports to Russia. On 29 July 2006, Russia shut down oil export to Mažeikių oil refinery in
Lithuania Lithuania, officially the Republic of Lithuania, is a country in the Baltic region of Europe. It is one of three Baltic states and lies on the eastern shore of the Baltic Sea, bordered by Latvia to the north, Belarus to the east and south, P ...
after an oil spill on the Druzhba pipeline system occurred in Russia's
Bryansk oblast Bryansk Oblast (), also known as Bryanshchina (, ), is a federal subject of Russia (an oblast). Its administrative center is the city of Bryansk. As of the 2021 Census, its population was 1,169,161. Geography Bryansk Oblast lies in weste ...
, near the point where a line to Belarus and Lithuania branches off the main export pipeline. Transneft said it would need one year and nine months to repair the damaged section. Although Russia cited technical reasons for stopping oil deliveries to Lithuania, Lithuania claims that the oil supply was stopped because Lithuania sold the Mažeikių refinery to Polish company PKN Orlen.


Impact

All IEA member countries who are net oil importers have legal obligation to hold emergency oil reserves, which is equivalent to at least 90 days of net oil imports of the previous year. Furthermore, under the EU regulations there is obligation to hold reserves equivalent to 90 days of consumption, so unlike the gas dispute with Ukraine in 2006, consumers were not affected. Poland had an 80-day oil reserve. The Czech Republic reported drawing oil from its 100-day reserves. Had the dispute prolonged, it is likely that alternative supplies would have been secured. International oil prices were not significantly affected. The involved countries have, however, expressed concerns about the reliability of the Russia-Belarus oil pipeline and Belarus as an oil middleman supplier. The events have also provoked renewed discussion on the government policy of phasing out
nuclear power in Germany Nuclear power was used in Germany from the 1960s until it was fully phased out in April 2023. German nuclear power began with research reactors in the 1950s and 1960s, with the first commercial plant coming online in 1969. By 1990, nuclear powe ...
.


Reaction

The
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...
has demanded an "urgent and detailed" explanation, according to a spokesman for Energy Commissioner
Andris Piebalgs Andris Piebalgs (born 17 September 1957) is a Latvian politician and diplomat who served as European Commissioner for Development at the European Commission from 2010 until 2014. Between 2004 and 2009 he served as Commissioner for Energy. Betw ...
. Piotr Naimski,
Poland Poland, officially the Republic of Poland, is a country in Central Europe. It extends from the Baltic Sea in the north to the Sudetes and Carpathian Mountains in the south, bordered by Lithuania and Russia to the northeast, Belarus and Ukrai ...
's deputy economics minister who is responsible for
energy security Energy security is the association between national security and the availability of natural resources for energy consumption (as opposed to household energy insecurity). Access to cheaper energy has become essential to the functioning of modern ...
, stated "This shows once again that arguments among various countries of the former Soviet Union between suppliers and transit countries mean that these deliveries are unreliable from our perspective." German Economy Minister Michael Glos stated that the dispute showed that "one-side dependencies must not be allowed to develop". Following a meeting with
European Commission The European Commission (EC) is the primary Executive (government), executive arm of the European Union (EU). It operates as a cabinet government, with a number of European Commissioner, members of the Commission (directorial system, informall ...
President
José Manuel Barroso José Manuel Durão Barroso (; born 23 March 1956) is a Portuguese politician and law professor. He previously served from 2002 to 2004 as the List of Prime Ministers of Portugal, 114th prime minister of Portugal and from 2004–2014 as the 11 ...
in
Berlin Berlin ( ; ) is the Capital of Germany, capital and largest city of Germany, by both area and List of cities in Germany by population, population. With 3.7 million inhabitants, it has the List of cities in the European Union by population withi ...
, German Chancellor Angela Merkel condemned the action, stating "It is not acceptable when there are no consultations about such actions". Commenting on the importance of trust in energy security, she said "That always destroys trust and no trusting, undisturbed cooperation can be built on that." Merkel continued by saying "We will certainly say to our Russian partners but also to Belarus that such consultations are the minimum when there are problems, and I think that that must become normality, as it would be within the European Union." Barroso said that "while there is no immediate risk to supplies, it is not acceptable" for such actions to be undertaken without prior consultation.


See also

* Foreign relations of Russia towards Belarus * 2004 Russia–Belarus gas dispute * Russia-Ukraine gas dispute *
Energy crisis An energy crisis or energy shortage is any significant Bottleneck (production), bottleneck in the supply of energy resources to an economy. In literature, it often refers to one of the energy sources used at a certain time and place, in particu ...
* Nord Stream 1, an undersea pipeline constructed to bypass transit countries. * Energy Charter Treaty, including principles for energy trade and transit which Russia is refusing to ratify. * Energy policy of Russia *
Energy policy of the European Union The energy policy of the European Union focuses on energy security, Sustainable energy, sustainability, and integrating the energy markets of member states. An increasingly important part of it is climate policy. A key energy policy adopted in ...
* Milk War


References


External links


Transneft
Russian state owned pipeline monopoly.
Beltransgaz
Belarusian gas pipeline company. {{DEFAULTSORT:2007 Russia-Belarus energy dispute Belarus–Russia relations Energy in Belarus Energy policy Energy policy of Russia Russia-Belarus Energy Dispute, 2007 Russia-Belarus Energy Dispute, 2007 Russia-Belarus Energy Dispute, 2007 Natural resource conflicts Political history of Belarus Political history of Russia Price disputes involving Gazprom Transneft