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. Last Updated: 07/27/2016

Rail Cargo to Estonia Halved

State monopoly Russian Railways has ordered exporters to halve shipments of refined oil products, metals and coal via Estonia amid renewed political tensions with Tallinn, industry and trade sources said Tuesday.

"There was a meeting chaired by [First Deputy Prime Minister Sergei] Ivanov and he ordered that transit via Estonia be limited," an industry source said on condition of anonymity.

A source close to Ivanov denied that his boss had ordered the cut and Russian Railways declined to comment. But oil traders said major exporters of refined products on the route had already halved shipments.

"All major fuel oil exporters -- TNK-BP, Gazprom Neft and even Surgut's Kirishi -- have been told to reroute half their volumes to other destinations," said a trader with a major operator on the route.

Relations with Tallinn hit a low in April when Estonia removed a statue of a Red Army soldier from the center of its capital, prompting Russian Railways to order a complete halt of rail deliveries to Estonia. The ban was lifted after 10 days.

Trade sources warned that if supply disruptions last longer this time, exporters would be hurt by traffic backlogs and supply gluts inside Russia.