Publication: Monitor Volume: 5 Issue: 22

Lithuania’s Mazieikiai refinery–the sole major refinery in the Baltic states–has been idle since January 30. The reason is a simple one: Russia’s state company Lukoil has stopped all deliveries of crude oil to Lithuania. Lukoil is in charge of Russia’s oil deliveries to the three Baltic states, and is empowered by the Russian government to control the operations of smaller Russian suppliers as well. Russian firms on contracts to Mazieikiai have informed the refinery that both Lukoil and “Russian official bodies” are withholding all export permits.

Yesterday Vilnius asked Moscow to both explain the reasons for the halt in deliveries and secure uninterrupted supplies of oil, which existing contracts stipulate. The Lithuanian Foreign Ministry’s note, delivered to the Russian embassy in Vilnius, expressed the hope that Moscow would adhere to a policy of bilateral cooperation and allow Russian firms to resume contracted oil deliveries. Lithuanian officials and Mazieikiai management pointed out that there were no technical or commercial obstacles to the deliveries, and that Lithuania is current on payments (BNS, February 1).

The Lithuanian government had not aired the issue publicly until last week, when the crude oil reserves were already running out. Vilnius evidently wants to avoid a public row. The suspended deliveries are generally seen as intended to pressure Lithuania into accepting Lukoil’s bid for a 33 percent interest in Lithuania’s oil sector, plus discount tariffs for Lukoil’s exports via Lithuania, once the Butinge maritime terminal is completed this year (see the Monitor, January 29).