Russia's state railways have ordered exporters to halve
shipments of refined oil products, metals and coal via Estonia amid
renewed political tensions with Tallinn, industry and trade sources
said yesterday.
"There was a meeting chaired by (Russia's First Deputy Prime
Minister Sergei) Ivanov and he ordered that transit via Estonia be
limited," one industry source said, speaking on condition of
anonymity.
A source close to Ivanov denied his boss had ordered the cut and
state railways declined to comment. But oil traders said major
exporters of refined products on the route had already halved
shipments. "It seems very similar to what we had earlier this year,
although more exporters are likely to be affected," one source
said.
Moscow's relations with Tallinn hit a low in April when Estonia
removed the statue of a Red Army soldier from the center of its
capital, angering Moscow and prompting state railways to order a
complete halt of rail deliveries to Estonia.
The ban was lifted after 10 days. Trade sources warned that if
supply disruptions last longer this time, exporters would be hurt
by traffic backlogs and supply gluts inside Russia.
Estonia is the transit route for 25 million tons per year of
Russian fuel, or around a quarter of the country's total oil
products exports. It is also an important transit route for coal,
metals, timber and chemicals.
Many Russian politicians have called on state officials to stop
re-exports of goods via Estonian ports, while Tallinn has said
Moscow should be kicked out of the G8 Group of most industrialized
nations for its controversial energy policies.
Problems have eased since May, although small firms had faced
problems with gasoline and naphtha exports via Estonia. The new
cuts will affect the most important product, fuel oil, mostly used
by power stations.
Russian Railways said in June it would cut the number of rail
cars plying the Estonia export route to 980 per day from the usual
1,500.
It asked oil products exporters to seek alternative ports in
Lithuania and Latvia and requested that timber cargoes go via
Finland and coal via Ukraine and Russia's Ust-Luga.
?
Trading sources at Estonian terminals said yesterday they believed
the new ban would not last long again.
Russia has drastically cut transit shipments of oil via
neighboring states, especially Latvia, Lithuania and Estonia, in
recent years after President Vladimir Putin called on the
government to stop subsidizing its neighbors with transit fees.
(China Daily via agencies July 18, 2007)
