The 17-year contract on the transit of Azerbaijani oil through Russian territory has been ceased.
Russian Prime Minister
Dmitry Medvedev signed an order early this May to revoke the intergovernmental agreement, which envisaged transportation of 5 million tons a year of Azerbaijani oil via the Baku-Novorossiysk pipeline at a rate of $15.67 per ton of oil transit.
Under the existing contract, Azerbaijani oil will be transported until the end of 2013.
The Russian government explained this decision with considerable loss.
Russia says it can restore the oil transit, but when market prices are renewed and a new agreement signed. But does Azerbaijan need this?
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