: Reuters: Russia reminds wayward ally Belarus of its economic muscle

14:39 Jul. 7, 2016

Reuters: Russia reminds wayward ally Belarus of its economic muscle

Russian President Vladimir Putin, right, and Belarusian President Alexander Lukashenko attend a news conference after their talks in the Kremlin in in Moscow, Russia, Tuesday, Dec. 15, 2015. (AP Images)

Subsidies for Russian energy to Belarus amount to approximately billion per year, around a third of the state budget revenues

When Russia annexed Ukraine's Crimea region, Belarussian President Alexander Lukashenko began trying to loosen his close ties with Moscow, fearing his country would be the next target.

Two years on, an abrupt drop in Russian oil supplies to the small ex-Soviet state may force Lukashenko into rethinking a policy that includes patching up relations with the West.

Read also National Interest: Russia deploys more lethal S-300 batteries to Belarus

The Kremlin appears to be sending a message that, with the Belarus economy in recession and propped up by subsidized Russian oil and gas, Lukashenko will pay a heavy price if he wants to turn his back on his old friends in Moscow.

Ukraine regularly accused Russia of political intimidation by cutting energy supplies in the years leading to the 2014 annexation during disputes that Moscow said were commercial.

Now Belarus is experiencing something similar. Since the start of this month, Russian oil pipeline monopoly Transneft has been pumping about 40 percent less oil to Belarus than in the second quarter of this year.

Belarus relies on Russian crude for its two oil refineries. The petroleum products they produce are sold abroad, generating about a fifth of total exports, official data show.

Minsk has been trying to buy crude from other suppliers, three oil market sources told Reuters. But that will be more expensive than Russian oil which Moscow offers at a discount.

Russian energy officials say the cut in deliveries to Belarus is the result of a commercial dispute.

But others view Russia's moves as its response to Lukashenko trying to draw closer to Western governments.

Full story

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