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...beginning of 2006 and 2009, Russia cut off energy supplies to Ukraine after disagreements over natural-gas prices, which subsequently caused fuel shortages in the European Union in the dead of winter. This January, all eyes are trained on Belarus, which has been having its own quarrel with Moscow over oil prices, threatening European energy supplies once again. But three weeks into the current standoff, there's been a twist: Kazakhstan, another former Soviet republic, stepped in last week to offer Belarus its own oil. Now the Kremlin's most reliable tool for controlling its neighbors - energy blackmail...

Author: /time Magazine | Title: Energy Wars: Russia's Neighbors Get Even | 1/25/2010 | See Source »

...Russia-Georgia war, Lukashenko declined to recognize the breakaway Georgian republics of South Ossetia and Abkhazia, despite pressure from Russia to do so. Lukashenko also joined the E.U.'s Eastern Partnership initiative, created in 2008 to strengthen ties between Europe and the ex-Soviet bloc, much to Moscow's dismay. And last June, Belarus refused to attend a key security summit in Moscow after Russia slapped a ban on Belarusian dairy products. (See pictures of Russia celebrating Victory...

Author: /time Magazine | Title: Energy Wars: Russia's Neighbors Get Even | 1/25/2010 | See Source »

...deserved its energy subsidies. When the two countries' existing oil contract expired on Dec. 31, Russia demanded additional payments of a whopping $2.5 billion, which amounts to about 5% of Belarus' entire economy. The Russian government also hinted that in order to keep oil prices down, Belarus should give Moscow a stake in its energy infrastructure - namely the oil refineries it uses to process oil for resale to Europe. This would play into Russia's larger aim of controlling the energy supply chain from the oil fields of Siberia to the gas stations of Western Europe...

Author: /time Magazine | Title: Energy Wars: Russia's Neighbors Get Even | 1/25/2010 | See Source »

...Then, on Jan. 19, three weeks into the dispute, Kazakhstan stepped in with a game-changing offer. It said that if Russia refuses to provide oil to the Belarusian refineries, it would be happy to take Moscow's place. The Kazakhs also said they would be willing to buy a stake in Belarus' Naftan refinery, which Russia's largest oil companies have coveted. "The demands of Belarusian refineries will be filled by Kazakh oil," said Anatoly Smirnov, Kazakhstan's ambassador to Belarus, adding that the two nations' Presidents have already discussed the idea and "no one has refused...

Author: /time Magazine | Title: Energy Wars: Russia's Neighbors Get Even | 1/25/2010 | See Source »

...most parts of the world, this would seem like a completely normal arrangement for two countries to make. But this is Russia's backyard. And Moscow, which has yet to react to the Kazakh offer, may not take kindly to two of its former republics' striking an energy deal behind its back. The offer demonstrates, however, that many former Soviet states might not care anymore if they anger their former benefactor. A sense of defiance has grown in the region since the Russia-Georgia war, which proved that Moscow would not stop at economic bullying in its efforts to maintain...

Author: /time Magazine | Title: Energy Wars: Russia's Neighbors Get Even | 1/25/2010 | See Source »

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