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Moscow Cutting Minsk's Oil Supply by 42%

Russia will cut oil pipeline supplies to Belarus by 42 percent in the fourth quarter amid a spat over the arrest of a Russian potash industry boss in Minsk last month, an export schedule showed Tuesday.

According to the schedule, Russia will ship 3.1 million tons of oil, 62,000 barrels per day, to refineries in Belarus via a pipeline from October to December, down from 5.3 million tons originally planned for the third quarter.

Russian oil pipeline monopoly Transneft has also said oil shipments to Belarus would be cut by 233,000 tons in September due to pipeline repairs.

The full fourth-quarter schedule of oil transit via Transneft has not yet been approved, industry sources said. Russia's total oil exports had been expected to decrease as more local refineries would be coming onstream after a heavy maintenance schedule in September.

News of the cuts followed the arrest of Vladislav Baumgertner, chief executive of the world's top potash producer, Uralkali, at Minsk airport Aug. 26, while the Belarusian leadership was  infuriated at the company's withdrawal from a potash cartel with state-owned Belaruskali.

Relations between Russia and Belarus have been bumpy with sporadic spats over gas pricing and food quality. Last month's arrest shook relations between the two countries, though generally, Moscow and Minsk are seen as allies.

The forthcoming cuts were first flagged by Deputy Prime Minister Arkady Dvorkovich, who has insisted that Russia would supply Belarusian refineries with 18.5 million tons of oil this year, not 23 million tons as Minsk has hoped.

Russia has supplied its neighbor with about 5.75 million tons of oil each quarter so far this year, or more than 17 million tons so far, both by pipeline and railroad.

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