December 31, 2019 / 1:18 PM / 21 days ago

FACTBOX-Russia's oil and gas disputes with Belarus

LONDON, Dec 31 (Reuters) - A fresh dispute over oil is looming between Russia and Belarus as Russian producers divert large volumes of crude to export ports after failing to reach a deal over deliveries to Minsk.

Below is a history of energy disputes between Russia and Belarus.

WHY THE DISPUTES?

Moscow and Minsk have had several oil and gas spats over the past decade in what has been described as a love-hate relationship between presidents Vladimir Putin and Alexander Lukashenko.

Putin and Lukashenko have repeatedly toyed with the idea of political integration of the countries, but the autocratic Belarussian leader who came to power in 1994 has backtracked repeatedly.

Several years after Russia’s Putin took office in 2000, he asked the government to work on ending subsidies to Belarus, including cheap oil for its refineries as well as cheap gas prices.

WHY IT MATTERS

Belarus depends heavily on Russian energy and also serves as an important transit route for Russian oil and gas to Europe.

About 10 percent of Europe’s oil - 1 million barrels per day - comes through the Druzhba (Friendship) pipeline via Belarus. The pipeline, which was built during the Soviet era, supplies Germany, Poland, Slovakia, Hungary and the Czech Republic.

Russia also supplies 33 billion cubic metres of gas to Europe - mostly to Germany - via the Yamal-Europe gas pipeline crossing Belarus. Those supplies amount to more than 6 percent of Europe’s gas consumption.

Pricing disputes have often resulted in interruptions of those flows.

FEBRUARY 2004

Russian gas pipeline monopoly Gazprom stopped supplying gas to Belarus from January 2004, ceding the contracts to smaller Russian companies after Minsk refused to agree to a price increase.

By February, Belarus had run out of gas and started taking volumes from the transit pipelines, Gazprom said. Russia suspended all transit flows to Europe for one day and Minsk signed a new supply deal at higher prices.

The dispute resulted in Russia speeding up work on its Nord Stream gas pipeline project under the Baltic Sea. That pipeline delivers gas to Germany, bypassing Belarus. Gazprom wants to finish building a second leg of Nord Stream in 2020.

JANUARY 2007

Another gas crisis was averted in January 2007, but relations soured further over oil supply.

Moscow doubled gas export prices for Belarus and imposed a new crude oil export duty.

Minsk retaliated by imposing a new oil transit duty. Moscow suspended deliveries to Belarusian refineries and Belarus started taking transit oil from the Druzhba pipeline.

Moscow fully suspended flows along the Druzhba pipeline for three days in January, causing small shortages in Europe.

The International Energy Agency that advises industrialised nations said the disruption had shaken confidence in Russia as an energy supplier and countries in Europe were forced to tap their strategic reserves.

Minsk ultimately caved in to pressure from Moscow and scrapped the transit duty.

2010

Russia halted oil supplies to Belarusian refineries in January 2010 after failing to agree terms for that year. However, transit flows to other parts of Europe remained unaffected.

There was further acrimony on the gas front in June, but it did not affect transit flows.

APRIL 2019

The biggest crisis in Druzhba supplies occurred in 2019, when Russia had to halt all flows through the pipeline for several weeks after Belarus and customers in Europe discovered chemical contamination in the oil.

Russian oil pipeline monopoly Transneft has yet to compensate customers in Belarus, Germany and Poland for millions of tonnes of contaminated crude.

Reporting by Dmitry Zhdannikov Editing by David Goodman

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