VLADIVOSTOK, Russia - Russia's pipeline monopoly on Monday blamed Ukrainian politicians for setting new unacceptable terms for oil transit via the port of Yuzhny, saying it will cut supplies if no quick deal is reached.

Transneft President Nikolai Tokarev told Reuters that Ukraine had asked Russia to pay more for transit and raised additional conditions concerning minimal volume guarantees.

We cannot and are not accepting tough terms. The (negotiation) process is continuing and I hope we will solve it before the New Year. But if they insist on their terms, we will also review the prospects of supplies, he said.

Asked about the cause of the dispute, Tokarev said: These are purely political issues there (in Ukraine).

Ukraine will hold presidential elections in January and analysts have said if a relatively pro-Russian leader is elected Moscow is likely to take a more accommodating stance in future energy negotiations.

Traders told Reuters on Friday Transneft had told them it would scrap the initial January programme for Yuzhny consisting of 0.5 million tonnes.

Oil firms will have to divert crude meant for Yuzhny to other destinations - such as Russia's Black Sea port of Novorossiisk or Primorsk on the Baltic.

Affected firms will include Rosneft, TNK-BP and Tatneft. One cargo was already sold to Morgan Stanley for Jan 8-12 delivery and rerouting it to another port will cause big logistical problems, traders said.

Yuzhny remains the last Ukrainian port through which Russia sends transit crude to the West after it stopped exporting crude via another outlet -- Odessa -- earlier this year. In 2008, Odessa and Yuzhny sent over 15 million tonnes of Russian transit crude - enough to feed a large refinery for a year. (Reporting by Gleb Bryanski, writing by Dmitry Zhdannikov; editing by Chris Pizzey)

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