Yukos faces oil production halt

Yukos, the Russian oil giant, could be forced to halt production because of a new court order, the company has said.

Reports said a court had agreed to a request from prosecutors that would prevent the company from accessing its bank accounts.

Yukos faces a demand for billions of dollars in back taxes and has said the bill could push it into bankruptcy.

The latest reports have reignited world oil prices, with New York light crude up 42 cents at $44.42 (£24) per barrel.

Oil rallies

London Brent gained 48 cents to $41.95 per barrel.

The new threat of Russian supply disruptions comes hot on the heels of US inventory figures showing a sharp fall in crude stockpiles, heightening fears of shortages in the run-up to the peak winter demand season.

Oil prices have risen by more than 36% so far this year.

The Moscow court ruling means prosecutors will be able to lay claim to 76bn roubles ($2.6bn; £1.45bn) in bank accounts belonging to Yukos, according to Reuters.

Yukos shares fell 4% on the latest news.

The company said the latest court ruling effectively froze all its bank accounts, halting payments to workers and preventing it from settling accounts.

"The arrest paralyses the productive capacity of Yukos," the company said in a statement.

"Fuel delivery in more than 40 regions of the Russian Federation will be threatened."

It also warned that the court decision could trigger social unrest among people who relied on the company for their livelihoods.

The deadline for Yukos to pay $3.4bn in back taxes for the 2000 financial year passed earlier this week.

Many Russians believe the case against Yukos stems from a falling out between ex-chief Mikhail Khodorkovsky and the Kremlin.

Mr Khodorkovsky and a key business associate are on trial for fraud and tax evasion.


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