Russia beckons Belarus to heel in oil supply row

MOSCOW/MINSK (Reuters) – Russia is trying to bring Belarus to heel by threatening to cut at least $2.5 billion in energy subsidies that prop up the economy of its ex-Soviet neighbor, analysts said.

Russia briefly cut oil supplies to Belarussian refineries this month in the dispute over Belarus’s lucrative business in exports of oil products refined from Russian crude, again raising the specter of supply disruptions for EU customers.

But the rift, which helped push U.S. crude above $81 a barrel on Monday, is about much more than energy subsidies.

At stake is the political future of Belarus, which is wedged between Russia and the European Union, and key Belarussian refineries that the Kremlin would like to see in the hands of Russian companies.

Reuters