Sunday, July 13, 2008

Russia Cuts Czech Oil After US Deal

PRAGUE, Czech Rep, July 13

Russia slashed oil supplies to the Czech Republic immediately after last week's signing of a Czech-US missile defense agreement, Czech officials confirmed Sunday.

But Czech government commissioner Vaclav Bartuska denied the move was in retaliation for Prague allowing Washington to base a radar system on its soil as part of a missile shield program opposed by Moscow. Speaking to DPA, Bartuska ruled out a technical problem, citing the uninterrupted flow of Russian oil to neighbouring countries such as Poland. He also said a retaliatory move was unlikely because his country could easily obtain oil via another pipeline running through Germany. But he declined to comment on reports from Moscow that the reduction might be linked to an internal Russian conflict over oil export rights in the wake of the handover of power in the Kremlin.

The Czech government has asked Moscow to explain the reason for the reduction, which began on July 4, but increased markedly after US Secretary of State Condoleezza Rice and Czech Foreign Minister Karel Schwarzenberg signed the radar deal on July 8. The business magazine Euro said cutback in supplies via the Drushba pipeline could go down from the agreed 500,000 tons in July to 300,000 tons.

Russia has in the past reduced energy supplies to the West for both political and economic reasons. Oil concern Lukoil has cut deliveries to Germany twice in recent months because it was unhappy at the price being paid.Supplies to the Baltic nation of Lithuania via a northern branch of the Drushba pipeline have been cut for two years, because of what Moscow calls a technical defect. EU and NATO leaders believe political motives are the reason. In 2006, Russia's Gazprom cut gas supplies to Ukraine in a pricing dispute and accused the country of siphoning off supplies meant for other countries. Ukraine and its Western allies saw the move as a political warning to the country's pro-Western leadership, something which Moscow denied. (Source)
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