A deal to restart the flow of oil from Siberia to western Europe appeared close last night, with Belarus claiming it had reached a compromise with Russia.
Although the Kremlin stayed silent, Belarus insisted that the end of the bitter oil dispute was imminent. The bilateral row has shutdown supplies of over a million barrels a day to Europe from Russian oilfields at the eastern end of a 2,500km pipeline.
It is believed that in exchange for Belarus dropping a newly imposed transit tax, Russia will call off its threat to slap duties on imports from what was, until recently, its closest ally from the former Soviet Union.
Oil prices fell to their lowest level in nearly 19 months on the news and an announcement of a steep rise in heating oil stocks in the US.
The decline extended an 11 per cent slide in oil prices since the start of the year as warm weather cut demand for fuel and big money funds changed their investment strategies.
US crude was down $1.51 to $54.13 a barrel after falling as low as $53.80, its lowest price since June 2005.
