TEXT OF INTERVIEW

SCOTT JAGOW: There’s no oil flowing from Russia through Belarus this morning. Russia has cut off the “friendship pipeline” as it’s called. So that means a few Europeans countries are getting stiffed on some of their oil. Our European Correspondent Stephen Beard is with us. Stephen, what’s behind this?

STEPHEN BEARD: Well this is an escalating dispute. I mean we have first of all the Russians doubling the price of natural gas that it sells to Belarus. Belarus slapped on a $45 a ton tax on Russian oil piped across its territory to Western Europe. Russia refused to pay. Belarus allegedly then started siphoning off some of that oil for its own use and the Russians shut off the whole pipeline. That of course has interrupted the flow of oil to Poland and Germany and got the European Union involved in the dispute and they Europeans are now saying, ‘enough is enough, we’ve got to stop this nonsense and we’ve got to get the oil flowing again.’

JAGOW: How has all this affected oil prices in the markets?

BEARD: Well this is really one of the most astonishing things. Oil did tick up $1 a barrel in the immediate aftermath of this story, but it’s since come down again and now drifting below $56 a barrel, which is pretty extraordinary given the fact that the world’s second-largest oil exporter has cut supplies to Western Europe. But it really does tell you something about the state of the oil market.

JAGOW: Well what does it tell us?

BEARD: It tells us that there’s a heck of a lot of oil sloshing around the system. And it’s very interesting, this is really beginning to worry OPEC. We have the cartel cutting output, well now you’ve got OPEC talking about not just cutting output but cutting investment in infrastructure.

JAGOW: Alright Stephen thanks a lot.

BEARD: OK Scott.

JAGOW: Our European correspondent Stephen Beard in London.