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. Last Updated: 07/27/2016

Levitin Says Oil Products Will Avoid Estonia Route

RIGA, Latvia -- Russia plans to export all of its refined oil products via its own ports, Transportation Minister Igor Levitin said in an interview published Monday.

His comments were the first official signal that Moscow had placed a ban on such exports via Estonia partly for political reasons.

Levitin was quoted as saying that one reason for a recent fall in shipments of fuel oil via Estonia was the fact that new Russian ports near St. Petersburg had increased capacity, making it unprofitable to ship the product via Estonia.

But politics also played a role, he told the Russian-language Latvian newspaper Chas.

"But, of course, business will develop where the situation is comfortable and profitable and where the moral and political climate are favorable," he said.

"This is very important for transit trade. A bridge is built from both ends," he said, answering a question on whether the move was politically motivated.

Russian firms had been shipping 25 million tons of refined oil products per year, one-quarter of their exports, via Estonia. But volumes have plunged following a political dispute between Moscow and Tallinn.

Estonian and Russian relations have worsened since April, when Estonia moved a memorial to World War II Red Army soldiers from a city center spot to a military cemetery, sparking two nights of riots by local Russian speakers and angering Moscow.

Russian industry and trade sources said last week that state-owned Russian Railways had ordered exporters to halve shipments of fuel oil products, metals and coal via Estonia after renewed political tensions with the Baltic state.

Levitin said Moscow would continue shipments of some cargos via neighboring states but considered refined products a strategic material, which should be shipped only through Russian ports.

"We do not plan to send all cargos coming to and from Russia through our own ports," Levitin said.

"About 30 percent, that is 200 million to 250 million tons, will go to Ukrainian and Baltic ports. But we will send strategic cargos, such as energy products, through our own terminals," he added.

The disruptions of refined products shipments echo similar moves by Moscow to reduce oil flows to the Baltic countries in previous years.

In 2003, Russia closed an oil pipeline to Latvia's Ventspils oil terminal and last year it shut the pipe to Lithuania's Mazeikiu oil refinery. Both states have been hoping Moscow will turn the taps back on again.

Levitin said Ventspils had little hope of recovering its crude supplies, as Russia had expanded its key oil port of Primorsk, which offered lower shipping fees.