The Daily Telegraph reported on Friday that the Russian government
had told at least one of its oil companies to prepare for a possible
cut in shipments to Europe in days in response to threatened sanctions,
citing a single unidentified source. Forex traders in Asia cited the
report as one reason for the dollar's decline against other currencies
and the rise in U.S. oil prices which were up 1 percent or $1.16 at
$116.75 a barrel. Oil traders said the approach of Tropical Storm
Gustav towards the Gulf of Mexico was driving prices higher.
The Daily Telegraph story said "reports have begun to circulate"
about a possible cut in shipments through the Druzhba pipeline that
feeds Poland and Germany, and that it was believed that executives from
top producer LUKOIL had been put on notice.
"They have been told to be ready to cut off supplies as soon as
Monday," The Daily Telegraph quoted "a high-level business source" as
saying, without naming the source or describing how the source had
access to the information.
The newspaper also said a senior Lukoil official in Moscow said he
was unaware of any plans to curtail deliveries. It said the Kremlin
declined to comment.
It also reported that the Polish government said Russian deliveries
were still arriving smoothly and it was not aware of any move to limit
supplies. The European Commission's energy directorate said it had
received no warnings of retaliatory cuts.
Further comment was not immediately available.
Any move would be timed to coincide with an emergency EU summit in
Brussels, where possible sanctions against Russia are on the agenda,
the newspaper said.
Oil traders have watched with growing unease the escalating row
between Russia and the West over Moscow's military action against
Georgia, which initially disrupted some Caspian flows.
Moscow has defied pressure from the United States and European powers to pull out of Georgia.
