Yukos freeze threatens oil prices

YUKOS, Russia's biggest oil exporter, is teetering on the brink of bankruptcy this weekend after its bank accounts were frozen because of a £1.9 billion tax demand.

Global oil prices could be sent soaring if the company is forced to shut down production.

Yukos pumps 1.72 million barrels a day and accounts for one in five barrels produced by Russia, the world's second-biggest oil exporter after Saudi Arabia.

The company must pay its bill this week, but claims it does not have the money. It warned last week that a Moscow court's decision to freeze its bank accounts would have a 'negative effect on its operations and its ability to continue as a going concern'.

Yukos, whose chairman Mikhail Khodorkovsky is on trial for tax evasion and fraud, could meet the tax demand by selling its £2.2 billion stake in Sibneft, the Russian oil giant controlled by Chelsea football club owner Roman Abramovich. But Sibneft disputes Yukos's ownership after a merger between the two collapsed last year following the chairman's arrest.

Khodorkovsky controls Yukos through his investment vehicle Menatep. This was run by Stephen Curtis, the British lawyer who died in a mysterious helicopter crash near Bournemouth airport in March.

The assault on Khodorkovsky, Russia's richest man, is thought to be inspired by Russian president Vladimir Putin. Analysts fear that a Kremlin crackdown on so-called oligarchs may be extended. More signs that they are liquidating assets came last week, when BP's Russian partner TNK cashed in £2 billion of shares.