By Michelle Fitzpatrick - 24th April 2006
Russia’s oil pipeline monopoly has warned of cuts to crude oil supplies to an “overfed” Europe.
The latest threat, hot on the heels of similar warnings from gas suppliers, will be fuelling European concerns over Russia’s reliability as an energy supplier.
"We have overfed Europe with crude [oil]. And every single economic manual says that excessive supplies depress prices,” Semion Vainshtok, head of Transneft, told Moscow newspaper Nezavisimaya Gazeta yesterday.
Transneft is planning the construction of a new 4000 km pipeline to China and works on the €9bn pipeline are set to commence shortly.
When it becomes possible to divert flows to China, South Korea, Australia and Japan, the Transneft chief intends to “immediately take away crude from our European colleagues”.
The alarming words follow just days after Gazprom, the country’s state gas monopoly, threatened to move gas supplies from the EU to north America or China.
This was widely seen as a reaction to British resistance against a possible takeover by Gazprom of the main UK gas supplier, Centrica.
According to EUobserver, centre-right German MEP Elmar Brok likened Gazprom’s threat to “the announcement of a Cold War with new methods”.
But the Russian government is trying to calm growing tensions over energy supplies to Europe.
The country’s first deputy prime minister – and Gazprom chairman - Dmitri Medvedev - is quoted in Handelsblatt saying, “Russia is a safe and reliable partner”.
German chancellor Angela Merkel will be travelling to Tomsk on Thursday to meet with Russian president Vladimir Putin, where energy talks are sure to be on the agenda.
Russia delivers over one third of the oil consumed in Germany and the country’s economy minister Michael Glos has called upon oil producers to “achieve a higher flexibility in oil production to stop every single bottleneck from driving up the prices.”
Speaking at a Doha energy forum, Glos also asked Qatar for more economic co-operation.
Opec has announced it will not raise its current oil output quota despite high prices.
“There is enough oil on the market,” said Qatar’s oil minister Abdullah bin Hamad el Attijah.
Commenting on Transneft's threats to cut EU oil supplies, an EU commissioner said today: "If they want to do so, they are free to."
Have your say...
Please enter your comments below.