Ukraine says Russia cut its oil supplies

[NNN0LHI]

http://msnbc.msn.com/id/7516434/

Refinery slowdown brings price squeeze to the region

Updated: 3:01 p.m. ET April 15, 2005LONDON - Russia has cut crude oil supply to Ukraine by nearly 25 percent in the first quarter, Kiev’s Energy Ministry said, a move linked by analysts and traders to tax and duty hikes by both governments on crude shipments.

“The higher Russian crude export tax together with the Ukrainian VAT change was definitely an important factor,” said Andreas Wild, an analyst at Moscow’s BrokerCreditService.

Ukraine’s new pro-European leadership, elected last year in a fiercely divisive poll, levied 20 percent value added tax on crude deliveries in an attempt to stop the lucrative re-export of Russian crude.

Russia, for its part, has been steadily notching up crude export duties as oil prices rise. As of April 1, crude export duty had risen to $102.60 per tonne from a level of $83 in effect in March.

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[scarletwoman]

1. Oh man. There are some nasty oil wars ahead as global demand outpaces

production...

sw

[Fenris]

2. That's not surprising.

Not at all, actually.

[Igel]

3. Not something I can much criticize.

Ukraine snubbed Russia; Russia's under no obligation to give Ukraine a break or subsidy.

Esp. if they use that break to buy oil they don't need, refine it, and export the products.