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By John Helmer in Moscow

The only foreign-language sentence that managed to lodge itself correctly in the brain of Ronald Reagan, before he developed Alzheimer’s Disease, but after he became President of the United States, was “doveryai no proveryai”. As he never tired of explaining, that is Russian for “trust but verify.”

Reagan and his successors always meant to apply that to treaties on arms deployments and limitations; and a useful maxim it was then, and now. But the words have never managed to lodge in President George Bush’s brain at all, nor in the Anglo-American media. For the former has been blaming, and the latter reporting, a blockade by the Kremlin against the Baltic state of Estonia, robbing it of essential oil and coal cargoes; and then stupefying the Estonian government’s ability to react by crashing the state’s computers with a cyber-warfare blitz.

In the oil export business, it usually takes a week before rail, port, and shipping statistics can be assembled for the preceding month, and so, now that’s June, it is possible to verify exactly what sort of blitzkrieg hit Estonia’s port of Tallinn in May.

Tallinn port depends for roughly 85% of its turnover on Russian export cargoes, mostly oil products and coal. So a fair gauge of a cutoff of Russian shipments to Estonia would appear in Tallinn port’s aggregate cargo tonnage for the month of May. The latest statistics show that the volume was 3.3 million tonnes; this is a gain of 2.2% compared to May 2006. For the first five months of this year, Tallinn’s turnover has jumped 9.5% to 18.7 million tonnes. The growth rate for Tallinn was a little faster in the four-month period to April 30. Total volume of cargo in that period was 15.4 million tonnes, a gain of 11% compared to the same period of 2006.

The Estonian feet in the water had been feeling a chill in April, before the political trouble started. That was because the April tonnage shipped through Tallinn port dropped 6%, compared to March. But the chill was even sharper in Tallinn’s rival to the southwest, the Latvian port of Ventspils. There the April to March volume dropped 17%.

The Latvians and Estonians collaborated with Adolf Hitler with equal enthusiasm during the last European War. But having lost that adventure, today they are rivals for Russian throughput and trade commissions. They are deadly afraid that Russian exporters can change the direction of their shipments with a crank of the rail-switch. That in turn depends on relative rail tariffs, port incentives, and tanker rates.

Russian oil producers and oil traders count these factors carefully, but they are among the most secretive businessmen on the shores of the Baltic in disclosing their operations. That’s because they are trying to hide the volumes and values of their cargoes from the Russian taxman, who would tax them if he could. It is unlawful tax evasion, according to Russian law, if the transfer price is 20% or more larger than the declared production and export prices.

The Baltic banks keep their mouths and books shut also, because they make a lucrative business laundering the difference between the price of oil and coal declared for export at the Russian frontier, and the real, free-on-board price, once the cargoes are on the water. As yet, noone in the Bush Administration has managed to find, or fund, a source of value-addition, production, or wealth in the Baltic states, which compares to what the Russians put in the Balts’ pockets in this shadowy fashion.

Nonethless, it is necessary to verify the best we can. Data obtained from Petroleum Argus for the three terminals at Tallinn port — Muuga, Tallinn, and Maardo — indicate that May deliveries of Russian petroleum products for export were 1.1 million tonnes. The loading of gasoline, mazut, kerosene, diesel, and gasoil is different at each terminal. The overall reduction in volume, compared to April, was 30%.

However, the biggest decline was at the Muuga terminal, where there was a big cut in mazut and kerosene. At the other two terminals, the reduction in shipments of mazut was much less. “We didn’t see a blockade”, Oleg Kirsanov, Petroleum Argus analyst, told Mineweb. “There were some problems at the beginning of the month, but after that, shipments started to move.”

If an international source based in Moscow might be suspected of being partial, who could doubt Urmas Glase, head of the press service of the Estonian railroad company, Essti Raudtee. According to Glose, total tonnage moved on Estonian tracks during May was 2.9 million tonnes. Out of this total, 1.7 million tonnes were oil products.

Note that is 600,000 tonnes more than the port terminals seem to have loaded aboard tankers. But more importantly, according to Glase, the tonnage was 1.7 million tonnes more than a Russian blockade should have allowed through, if there had been a blockade at all. The month to month decline was 19%, according to the Estonian statistics. Glase added for Mineweb specialists: “The main decline was caused by beznine and diesel fuel. [Shipment volume of] other products was on the same level [as April].”

Curiously, when the American wire service Bloomberg asked Glase the same questions, his remarks came out sounding quite different. “Eesti Raudtee,” runs the Bloomberg report, “said that cargo traffic from Russia declined by about one-third in May from April amid tensions between the neighboring countries over a former Soviet war memorial. The number of cargo trains received in Estonia fell to an average 23 trains per day in May from 35.2 trains in April and 32.3 trains one year earlier, Urmas Glase, a spokesman for Eesti Raudtee, said in a statement.”

Three Russian oil companies supply the Estonian trade — TNK-BP (which is operated by British Petroleum); Gazpromneft, the state-owned oil company which used to belong to Roman Abramovich; and Surgutneftegaz (SNG)h is the biggest of the Russian exporters through Estonia.

A spokesman told Mineweb: “We are not going to speak about exact volumes, as we are not playing these political games”. But a source at the oil company added that there were no unusual cutbacks in shipments.

Alexei Bezborodov, a Moscow maritime analyst, explains why. The drop in Russian oil shipments to Tallinn in May this year, compared to April, happens every year. Total cargo volume at Tallinn fell from April to May, 2006, by 15%; and in 2005 by 12%. In other words, counting all cargoes Tallinn’s May-time drop was less than half the fall-off recorded a year ago, and exactly half of the 2005 result.

The Russian Railway Company (RZD), a state company run by a man very close to President Vladimir Putin, told Mineweb this seasonal cutback in cargo always happens in May, because that is when the management figures the weather is good enough to schedule spring repairs on the rail-lines. According to Anna Vostrukhova of Severstaltrans, a private Russian rail operator, there were no cutbacks of rail cargo shipments.”We have fulfilled all applications to Estonia — as in April, so in May and the same situation will be in the current month.”

Conclusion: the Russian railway companies are telling the truth when they claim they moved every drop of oil or lump of coal that was booked for shipment out of Tallinn. The reason there was less oil, though apparently not much less coal, was that the logistics managers could schedule fewer trains in the line time available when crews were not at work. The Estonian version of the truth is limited to the fact that there was less Russian oil to load, compared to April, even though there was more oil compared to May of 2006.

Still, the Estonian rail data appear to have been manipulated in their release, according to calculations by Bezborodov. In April, the Estonian statistics on cargo deliveries were in line with port loading and shipment results, but for May there appears to be a gap. According to the Estonians, about 600,000 tonnes less Russian oil cargo was delivered by rail than the port statistics indicate was loaded on vessels.

At Tallinn, port warehouses and tanks cannot hold this volume. Bezborodov, who did his calculations based on the volume of oil per railcar, told Mineweb that 600,000 tonnes is a lot of oil to disappear between the railcar and tanker, and he doesn’t know how to explain it. The value of that much oil at May prices exceeds $250 million.

Russian shipments of coal for export through Tallinn, also delivered by rail to the port, appear not to have been hurt at all during the period of political propaganda. Through April, coal volumes through Tallinn were up 31%, compared to last year. Russian coal shippers say they will need another week before they can issue the May statistics for Estonia. One point is already clear: when it comes to shipping Russian coal, Tallinn is doing considreably better this year than the Latvian rivbal ports, Riga and Ventspils.

Perhaps the explanation for the phantom 600,000 tonnes of oil, loaded from port but never delivered by rail, is the cyber-warfare reported by American newspapers and television in mid-May. At the time, the New York Times reported that “the attacks consisted of a barrage of clicks on a given website, leading to overload. Some sites faced up to 5 million clicks a second, [Estonian Prime Minister Andrus] Ansip said, compared with a normal level of 1,000 to 1,500 clicks a day. The attacks peaked on May 8 and 9 — during events in Russia and the Baltics marking the anniversary of the World War Two victory over the Nazis.”

The Estonian explanation, reported by the US media, was that the Kremlin had left its own IP-addresses in the attacks, and that the purpose was to shut down Estonian state websites. “It is clear this is criminal activity. I hope Russia will co-operate in those cases with Estonia,” the New York Times quoted Prime Minister Ansip as saying.

A technical analysis by The Exile, an English-language weekly published by American Mark Ames in Moscow, found no computer expert willing to endorse the theory of a Kremlin plot. A Finnish computer security expert was cited for the finding that “there were thousands and thousands of attack sources. This could have been the kid of a janitor of some government
building in Moscow. This is not a government-run information warfare attack.” According to the Exile, another expert, Daniel Golding of the UK-based Hellbound Hacker collective, said: “The way Estonia has reacted is just absurd. These attacks could have literally been initiated by some 15 year-old teenage boy in his bedroom, who clicked a button saying ‘attack this Estonian bank.'”

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