Russia's state-controlled gas monopoly Gazprom says it will dramatically increase natural gas prices for Belarus. In this report from Washington, VOA Senior Correspondent André de Nesnera discusses the ramifications of this move for the two countries.
Gazprom wanted initially to quadruple natural gas prices for Belarus beginning January 1. Gazprom was seeking $200 per 1,000 cubic meters - but later said it would consider cutting that amount in half in exchange for a 50 percent share in a pipeline that carries Russian gas through Belarus to parts of Europe. Talks between Russia and Belarus have failed to resolve the issue, prompting Gazprom to threaten Belarus with a gas cut-off at the start of the new year.
Experts say this dispute highlights an increasing chill in relations between Moscow and Minsk which are joined in a loose federation. Russia is one of the last allies of Belarus leader Alexander Lukashenko, considered by many western leaders as the last dictator in Europe.
Robert Legvold, a Russia expert at Columbia University, says this latest argument indicates that the Russian leadership is not so committed to Mr. Lukashenko.
"Which, from my perspective, means that the Putin government is prepared to signal to Lukashenko that they have leverage in this relationship and that their interests, both economic and political, need to be respected," he said. "I don't think it means that they are about to begin forcing Lukashenko to transform the situation politically within Belarus, but I think it's a clear signal that they have their own separate interests and they are not about to simply give him large gifts because they want to be close."
Some analysts say Moscow is now more than ever willing to use its vast oil and gas resources as a foreign policy tool.
Marshall Goldman, a Russia expert with Harvard University, says that trend started several years ago.
"Suddenly in 1999, oil prices begin to rise, oil production begins to go up, the country begins to develop a trade surplus, people want its energy, the energy situation tightens because of new entrants such as China and India beginning to become big demanders of energy," he said. "And so Russia now finds itself with a very valuable commodity that brings it money, that brings it power, that brings it prestige, that brings it leverage that it didn't have before. And so now it's in a position to be very assertive."
At the beginning of this year, Russia made good on a threat to cut off natural gas supplies to Ukraine in another dispute with Gazprom over prices - a quarrel that was eventually resolved. That move briefly disrupted deliveries to Europe and brought about international condemnation.
But Robert Legvold, from Columbia University, says he doesn't see Russia using its oil to exert pressure on Europe.
"At the macro [economic] level Europe is now probably 30 to 35 percent dependent on Russian gas for their supply," he said. "But Russia is dependent on Europe for 80 percent of its export market in gas. So on the one side, you've got supply dependency on the part of the Europeans - particularly the central Europeans - where their dependency on Russian gas rises to 75, 80 percent. And on the other hand, you've got market dependency on the part of the Russians. They have no way to easily shift this gas to any of their other potential buyers, such as the Asians - there are no pipelines to take it to Asia at this point."
Legvold says he sees no reason why Russia would want - from a political point of view - to cut off gas to Europe and discredit itself as a reliable supplier in the international market. He says that would send a very negative message especially to the potentially lucrative energy markets of China and India - markets that Russia covets.