Putin denied that Russia uses its energy resources for achieving political aims

Russian President Vladimir Putin said Russia was not using its growing economic clout, particularly its vast energy resources, for political purposes.

"We are always told that Russia is using its... economic resources to achieve foreign policy aims. That is not the case," he told an annual news conference in the Kremlin.

Russia has angered its former Soviet neighbors over the last year by insisting they pay a market rate for its gas and oil. It has twice infuriated Europe by cutting off major pipelines to win pricing disputes with countries through which the pipelines pass.

Russia blamed last year's gas disruption on Ukraine and this year's 60-hour stoppage of the main oil pipeline to Europe on Belarus, but the two episodes tarnished its image in Europe, which expects to rely increasingly on Russian energy in future.

Some European analysts and politicians worried that Kiev and Minsk were being punished for distancing themselves from Moscow.

Putin insisted Russia had done nothing wrong and its aim was to ensure it kept its promises to its energy customers.

"Russia has always met and will continue to meet its obligations to supply its customers but we are not obliged to subsidize other countries' economies on an enormous scale ... No one is doing that -- why are we required to?"

And cheap energy for Russia's neighbors cost $4.2 billion a year, he said.

"If this figure is going to go off the scale, and we think it already has, of course we are going to seek direct supply routes."

Putin, who once compared transit countries to "parasites on Russia", said he had ordered the state oil pipeline monopoly Transneft to expand the Baltic pipeline network, enabling Russia to export an extra 1 million barrels of oil a day by sea.

"This will allow us to cut transit risks," he said.

Gas monopoly Gazprom is already working on a similar project to avoid dependence on Ukraine by building a pipeline under the Baltic Sea to Germany.

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