Azerbaijan has stopped importing gas from neighbor Russia after its government refused to pay the significantly inflated price Moscow offered for 2007 deliveries. Simultaneously, Azerbaijan has ceased exporting oil to Russia because it requires the commodity domestically.

According to a report from the Eurasia Daily, the former Soviet state of Azerbaijan has refused to pay the $235 per 1,000 cubic meters of gas Russia was asking for to continue exporting its gas to its southern neighbor in 2007. The price demand is more than double the $110 per cubic meters of gas Azerbaijan paid in 2006.

The Azerbaijani president, Ilham Aliyev, has described Russia’s offer as commercial blackmail and said that he cannot allow that to happen. Therefore, supplies of Russian gas ceased to be delivered to Azerbaijan from the start of January.

Meanwhile, Novosti has reported that Azerbaijan has also cut its supply of oil to Russia. The Russian news agency has referred to a source in the Azerbaijani government for the report, stating that the South Caucasus country has stopped shipments because it needs the oil to maintain its own electricity supply.

However, curiously, the State Oil Company of Azerbaijan has stated that it has no information about suspended supplies.