Refusal of transit through Latvia - revenge for the EU sanctions

Lukashenko wants to punish Europe, and flirts with Russia.

Andris Maldups, head of the transport policy department at Latvia's Ministry of Transport, said this week that the loss of Belarus' transit business could cost the country Lats 640 million ($1.16 billion), or around 5% of GDP.

The major cargoes are oil products and potash fertilizer from Belarus, and coal from Russia.

"This announcement came as a surprise, because we have very good relations at the moment with Belarus," Maldups told Platts in an interview.

"Only three weeks ago we had the meeting of the Latvian-Belarusian Intergovernmental Commission where both sides agreed to expand cooperation in transit," he said.

Ilze Nagla, spokeswoman for Ventspils Nafta, refused to disclose how much of the company's roughly 12 million mt/year of oil product transshipment is sourced from Belarus.

But it is believed that the majority of production from the Belarus Novopolotsk refinery transits Ventspils via the existing 5 million mt/year capacity Polotsk-Ventspils oil products pipeline, with additional volumes of oil product arriving via rail from both Belarus and Russia.

Lukashenko's announcement may have stemmed either from a desire to boost relations with Russia, or to punish EU countries for leveling sanctions against Belarus earlier this year, Maldups said.