Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

NATO-Russia Oil Showdown Fizzles




The predicted showdown between Russia and NATO over a potential blockade of oil shipments to Yugoslavia lost momentum Monday as Russia said it was not making any deliveries and a NATO general ruled out the use of force to stop shipments.


Russia's Fuel and Energy Ministry said earlier this month that oil shipments to Yugoslavia were suspended when NATO raids began March 24. "I'm unaware of any changes in the ministry's stance,'' ministry spokesman Sergei Slesaryev said Monday when asked whether the suspension was still in force.


Russia had been supplying 80,000 metric tons of oil a month to Yugoslavia via pipelines running through Hungary and Slovakia until the NATO raids started last month.


With Bulgaria and Romania officially joining the oil embargo against Yugoslavia in recent days, any Russian firms that might try to supply the Milosevic regime would have to stick to seaborne routes only.


Bulgaria has stopped oil and other refined petroleum products such as gasoline from being delivered by land across its border, a spokeswoman for the Bulgarian Embassy in Washington told Reuters on Monday. With Romania also agreeing to take part in the oil embargo, Yugoslavia's eastern border is now cut off from petroleum products.


However, NATO is unsure whether an embargo can be enforced on sea transport. General Klaus Naumann, who commands NATO's Military Committee, told reporters on Monday that NATO warships would not use force in attempts to halt shipments of oil, but would instead operate under a "visit and search" inspection regime.


"A 'visit and search' regime does not give us the right to force anyone to abandon his course. So we cannot stop a merchant vessel by the use of force," Naumann told reporters at a breakfast meeting in Washington. He said the search plan would have a damping effect on oil shipments to Yugoslavia.


Though it is not currently shipping any oil, Russia has said it cannot impose restrictions on private Russian oil companies to please the North Atlantic Treaty Organization.


Oleg Rumyantsev, personal spokesman to Fuel and Energy Minister Sergei Generalov, said that all oil shipments to Yugoslavia were carried out by private companies, and the ministry had no information on whether they had shipped any crude since NATO raids started a month ago.


It could be difficult for Russian companies to deliver oil via its usual pipelines because Hungary became a new NATO member last month, and Slovakia wants to become a member and is eager to maintain good ties with the alliance.


Andrei Pershin, a spokesman for Slavneft company that ships oil to Slovakia said that it had not supplied any oil to Yugoslavia. "I can't answer for our partners in Slovakia,'' he said.


Russia's Yukos oil company, which has sent oil through Hungary, had previously denied sending oil to Yugoslavia since the conflict began.


Analysts said there is little economic incentive for Russian companies, as Yugoslavia has to be regarded as a high nonpayment risk.


Ruslan Nickolov, oil analyst at Nomura International, said Yugoslavia has never been a major client for Russian oil companies. LUKoil, for example, shipped only $6.5 million worth of light oil directly to the country last year, he said.