Russia said Wednesday that oil supplies to Europe through Belarus are flowing as normal while talks continue following Russia 's move to suspend crude oil deliveries to Belarus on Jan. 1.

Russia 's two biggest oil producers, OAO Rosneft (ROSN.RS) and OAO Lukoil Holdings (LKOH.RS), Wednesday confirmed they cut supplies to Belarussian refineries due to a pricing dispute.

Rosneft and Lukoil are currently in talks with Belarussian officials over the price of oil, spokespeople for the two companies said.

A similar dispute in January 2010 caused disruptions in the flow through a pipeline system that supplies around 10% of the European Union's oil needs. However, a spokesman for Russian state-controlled pipeline operator OAO Transneft (TRNFP.RS) said transit shipments haven't been affected by the latest dispute.

Russia sent around 1.6 million barrels of oil to Europe via Belarus last year, primarily to Germany and Poland , but volumes are expected to decline slightly this year, as Russia expands the Baltic Pipeline System that bypasses Belarus .

Belarussian state energy firm Belneftekhim said last week it has enough oil to last for the rest of January.

"Old contracts have expired and new ones have not been signed so far," a spokeswoman for Belneftekhim said Wednesday, according to the Belarussian news agency Belapan. New deals were expected to be signed soon, she said.

Russian crude exports to Belarus dropped 40% last year to around 13 million tons, after Russia canceled a discount on export duties.

On Jan. 1, Belarus became exempt from paying export duties on Russian oil and oil products when it entered a customs union with Russia and Kazakhstan . In return, Minsk will compensate Moscow when exporting refined products to Europe . But despite the new oil trade agreement the two countries have been unable to agree on the price of crude to be supplied to Belarus this year.

"The latest incident appears to be more technical than political," said IHS Global Insight.

Transneft said the halt in oil supplies was unrelated to a 12.5% tariff increase for transit through Belarus , which will come into effect Feb. 1.

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