07MOSCOW2191, UPDATE ON RUSSIA-ESTONIA STANDOFF

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Reference ID Created Released Classification Origin
07MOSCOW2191 2007-05-11 12:50 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO2464
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #2191/01 1311250
ZNY CCCCC ZZH
O 111250Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0148
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 002191 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR/RUS WARLICK, HOLMAN, AND GUHA 
DEPT FOR EB/ESC/IEC GALLOGLY AND GARVERICK 
DOE FOR HARBERT/EKIMOFF/TILLER 
DOC FOR 4231/IEP/EUR/JBROUGHER 
NSC FOR KLECHESKI 
 
E.O. 12958: DECL: 05/11/2017 
TAGS: ECON ENRG EPET ET PREL RS
SUBJECT: UPDATE ON RUSSIA-ESTONIA STANDOFF 
 
REF: A. MOSCOW 2086 
     B. TALLINN 297 
 
Classified By: Amb. William J. Burns.  Reasons 1.4 (b/d). 
 
1. (C) Summary.  President Putin kept rhetorical pressure on 
Estonia in a May 9 Victory Day speech, but Russian Railways 
(RZD) denies that oil product and coal shipments to Estonia 
have stopped.  An RZD spokesperson said that, during its 
nationwide "annual renovation program," companies would need 
to find alternate routes for some shipments.  Rail schedules 
are divided into two components -- base and "additional" 
schedules.  The reported 30 percent drop in oil product 
shipments to Estonia is attributable to RZD's not approving 
an "additional" schedule for May shipments to Estonia.  RZD 
approved the base schedule.  It is not clear how much coal is 
making it to Estonia.  However, Estonia does not use any 
Russian coal for domestic purposes.  The bottom line is that 
oil products are reaching Estonian and other European 
customers -- albeit at a cost to some Russian shippers.  The 
Estonian Embassy has requested better security for its 
consular office in Pskov, after someone fired a gunshot 
through a window there on the night of May 9 or early May 10. 
 End Summary. 
 
The Official Line 
----------------- 
 
2. (C) While President Putin used his May 9 Victory Day 
address to take aim at countries that "belittle" and 
"desecrate" memorials to war heroes, Russian barbs seem 
limited to rhetoric at this time.  On May 11, we again spoke 
with Russian Railways (RZD) press secretary Yelena Federovna 
who confirmed that her company continues to send oil products 
and coal to Estonia.  She re-iterated that RZD is 
implementing its nationwide "annual renovation program" from 
May to September and that shippers will likely need to find 
alternate routes for some of their products.  She flatly 
stated that her company has no plans to end service to 
Estonia. 
 
Rail Scheduling 
--------------- 
 
3. (C) A reliable contact in the trading community explained 
that each month there are two rail schedules -- the base 
schedule and the "additional" schedule.  The base schedule is 
fairly constant month-to-month and is usually approved by RZD 
around the 20th of the previous month.  The "additional" 
schedule is for shipments over and above the base amount and 
can be requested any time during the month and is routinely 
approved by RZD. 
 
Oil Products Shipments 
---------------------- 
 
4. (C) Reuters reported May 11 that oil product shipments to 
Estonia are down 30 percent.  Our contact said that the 30 
percent decrease is due to the fact that RZD is not approving 
any "additional" shipments for May to Estonia.  Further, the 
May base schedule was only approved on May 7 -- over two 
weeks later than normal -- and these oil product shipments 
are now moving to Estonia. 
 
5. (C) However, not all shippers are created equal. 
According to another trader, part of TNK-BP's base shipment 
quota was essentially transferred to Surgutneftegaz. 
Gazpromneft has also taken a hit but not to the extent TNK-BP 
has.  Nevertheless, these disadvantaged shippers continue to 
find ways to re-route the volumes that historically go 
through Estonia for re-export.  The Russian shippers are 
absorbing the higher costs from these alternate routes. 
Companies are using ports in Lithuania, Latvia, and, to some 
extent, the St. Petersburg port to move their products. 
 
Coal 
---- 
 
6. (C) The story on coal shipments is less clear.  Russian 
coal exporters have complained publicly that May exports to 
Estonia are at risk because RZD is suddenly requiring them to 
provide their own rail cars.  RZD's Federovna denies this and 
says coal shipments continue.  In any event, Estonia 
 
MOSCOW 00002191  002 OF 002 
 
 
re-exports almost all of the coal that it imports from 
Russia, so is in no way dependent on Russia for this energy 
source. 
 
Shot Fired at the Pskov Consular Office 
--------------------------------------- 
 
7. (C) The Estonian Embassy has requested increased security 
at its consular office in Pskov, near the Russian-Estonian 
border, after someone fired a shot through the building's 
window late May 9 or early May 10.  None of the five Estonian 
employees were in the building at the time, and no one was 
injured, reported Estonian Political-Counselor Anne Harmaste. 
 The same building includes a Latvian consular office.  The 
bullet was fired into the consular chief's office.  The lone 
Russian militia guard reporte
d that he did not hear any 
shots, Harmaste told us.  Intermittent demonstrations 
continue in front of the Estonian Embassy in Moscow, but none 
are sustained or as confrontational as those in early May. 
 
Comment 
------- 
 
8. (C) While falling short of full disclosure, RZD's line is 
consistent with the reported reduction in oil product exports 
to Estonia.  The company has not stopped shipments but rather 
has simply not approved what have come to be pro-forma 
requests for additional shipments.  Most important, though, 
is not the veracity of RZD but the fact that all of the oil 
product shippers seem to be fulfilling their contractual 
obligations to their customers in Estonia and other European 
markets. 
BURNS

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