REFILE-UPDATE 1-Russia orders oil cut to Belarus after potash clash

Wed Aug 28, 2013 9:26am EDT
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* Belarus hikes excise duties on gasoline, diesel

* Follows arrest of CEO of Russia's Uralkali in Minsk

* Traders say countries heading for trade war

By Dmitry Zhdannikov and Vladimir Soldatkin

MOSCOW, Aug 28 (Reuters) - Russia ordered its oil firms on Wednesday to cut supplies to neighbouring Belarus by around a quarter, in a major escalation of a trade and diplomatic dispute following the arrest in Minsk of the boss of Russian potash firm.

Trade disputes between Russia and Belarus have affected oil deliveries in the past, causing knock-on disruptions to pipeline flows via Belarus to European countries such as Poland and Germany.

Memories of those cuts, which led to oil price spikes, resurfaced this week after a major diplomatic row erupted between Moscow and Minsk.

Belarus this week detained chief executive of Russia's Uralkali, the world's top potash producer, accusing him of inflicted severe economic damage following the collapse of a Russia-Belarus sales cartel.   Continued...