Russia ordered its oil companies Wednesday to cut supplies to Belarus by about 25 percent and warned the cuts could last months.

Belarus relies entirely on Russian oil to keep its two major refineries running to supply the local market.

Russian pipeline monopoly Transneft said on Wednesday Russia would cut oil supplies to Belarus by 400,000 tons in September due to maintenance work at the trunk pipeline.

The two countries are in the midst of an escalating trade dispute.

Vladislav Baumgertner, the chief executive of Russian potash company Uralkali, was arrested in Balarus‘ capital Minsk this week.

In Belarus, state investigators said they may prosecute billionaire Suleiman Kerimov, the top shareholder in Uralkali, which controls 20 percent of the world potash market.

Kerimov, a 47-year-old native of the Caucasus province of Dagestan in southern Russia, has close ties to President Vladimir Putin’s administration and completed a Kremlin-backed Russian potash merger in 2011.

On Thursday, Russian news agencies quoted Deputy Prime Minister Arkady Dvorkovich as saying Belarus would receive reduced volumes of oil in the fourth quarter, indicating the cuts would carry on long past September.

On the basis of planned oil deliveries for 2013 and on the volumes which already have been shipped, the cuts in oil supplies will surely affect the fourth quarter, the government press service cited Dvorkovich as saying, according to Interfax.

Source: VOANews


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