Russia signs Ukraine oil deal

Russia and Ukraine have reached a deal that will avoid disruption of oil supplies to the EU, according to Ukraine's state energy firm Naftogaz. Moscow had agreed to a 30 % increase in the transit tariff for oil piped to Europe through Ukraine, it said. There was no confirmation from Russia. Moscow had warned the dispute could threaten oil deliveries to EU states. Russian PM Vladimir Putin accused Kiev of abusing Russian oil transits but said he hoped a deal would be reached. "We are ready to deliver, we have a contract, but if any of the transit countries abuse, what can you do?" said Mr Putin. Nikolai Tokarev, head of Russian pipeline company Transneft, said on Monday that Ukraine had demanded higher payments for the transit of Russian oil, changing the terms of a 2004 contract and thereby raising the prospect of a year-end energy dispute. Russia said the dispute could cut supplies to the Czech Republic, Slovakia and Hungary. Last month Moscow said it had reached a deal which should prevent a repeat of the gas supply crises of recent years. It agreed to ease the terms under which it supplies gas to Ukraine after talks between Russian Prime Minister Vladimir Putin and Ukraine's Yulia Tymoshenko. Moscow said that deal should prevent disruption - last January, many countries in Europe were left short of gas due to a payment dispute between Moscow and Kiev. Russia provides about a quarter of the gas consumed in the EU and 80 % of that is piped through Ukraine.