Russia lifted the threat of a halt to oil sales by the country's largest oil firm Yukos today to send the company shares surging and easing tension on tight oil markets.
The decision followed a day of drama yesterday, when a warning by Yukos that an asset freeze ordered by bailiffs could hit oil sales by its operating companies, which pump a fifth of Russia's oil, pushed US crude oil futures to record highs.
Oil prices fell from record levels on relief that oil deliveries from Russia - the world's second largest oil exporter - may not be disrupted. Yukos shares rallied over 20 per cent after diving to three-year lows yesterday.
"The companies themselves have regained legal control over their property, and above all the right to sell oil and carry out financial transactions," a Yukos source said.
But the source said an existing ban on fixed-asset sales by Yukos's operating units remained in force. Justice ministry letters released by Yukos confirmed that view.
Analysts said the apparent climbdown by the authorities may offer little respite for Yukos, which has said it could collapse by mid-August as bailiffs seek to recover a $3.4 billion tax debt for 2000 while its bank accounts and assets are frozen.
Bailiffs plan to sell its largest unit Yuganskneftegaz, culminating what is widely seen as a Kremlin campaign to destroy the business empire of politically ambitious former chief executive Mr Mikhail Khodorkovsky, who is on trial for tax evasion and fraud.
Mr Khodorkovsky's trial, which began in mid-June, resumed on Thursday, with the prosecution presenting case documents.
The Moscow city court threw out a request to have Mr Khodorkovsky and co-defendant Mr Platon Lebedev released on bail for the duration of the trial. Both could go to jail for 10 years if convicted.