The Russian government has reportedly told its oil companies to prepare to cut off shipments to Europe in response to the European Union’s threat of sanctions, the British Daily Telegraph reported Aug. 29, citing an unnamed source. The report was immediately refuted by LUKoil, Russia's largest privately owned oil company, as well as by the Kremlin through Russian Energy Minister Sergei Shmatko, who said, “We are doing everything we can so Druzhba can keep working stably and supply European consumers with enough oil.” Druzhba is the main oil pipeline through which Russia supplies Europe with nearly 1.4 million barrels per day (bpd). (click image to enlarge) Even with the speedy Russian denial, the timing of the Daily Telegraph report is crucial. The European Council will gather the heads of EU member states Sept. 1 to discuss the Russian intervention in Georgia and the possibility of imposing economic sanctions.