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Business

Potash row: Russia throttles oil to Belarus

Russia is using oil as a weapon in its potash dispute with Belarus. Officially, Moscow’s reduction in supplies is due to pipeline repair work. But few doubt it comes in retaliation to the arrest of a Russian businessman.

Oil delivery to Belarus would be cut by 400,000 tones in September, Russia's state-owned pipeline company Transneft announced Wednesday.

Under an effort to avert a threat to the environment, some 700 kilometers (434 miles) of pipeline between Russia and Belarus needed to be urgently repaired, the company added.

The reduction in oil supply to Belarus amounted to almost a quarter of all Russian oil deliveries to its Western neighbor and had come entirely unexpected, commodities traders told the news agency Reuters.

The traders, who were not named, also told the agency that the two countries were apparently headed toward a "trade war" following the arrest of a Russian businessman by Belarus on Monday.

Watch video 01:11

Russia-Belarus trade dispute turns ugly

Vladislav Baumgertner, Chief Executive of Russian potash producer Uralkali, was arrest in Minsk on charges of abuse of office at a cost of $100 million (74 million euros) to Belarus.

Baumgertner was in the Belarus capital at the invitation of Prime Minister Mikhail Myasnikovich to discuss the cancellation of a joint venture between Uralkali and Belarus Potash Company (BPC).

The two companies control about 40 percent of world potash production - an ingredient which is essential for producing fertilizer.

On Tuesday, the Russian Foreign Ministry summoned the Belarus ambassador to issue a rebuke, warning of unspecified consequences if the Uralkali CEO was not released immediately.

uhe/ipj (Reuters, AFP, dpa)

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