Updated at 18:49,15-10-2021

Belarus And Russia Finally Agree On Oil Supply Price And Terms


Belarus And Russia Finally Agree On Oil Supply Price And Terms
Minsk and Moscow reached an agreement to restart Russian crude oil supplies to Belarus following a months-long dispute over transit fees.

The parties discussed the resumption of oil supplies to ensure the full-capacity operation of the Belarusian oil refineries.

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According to three Reuters sources, Russia has increased the discount at which Belarus may import Russian oil by $12 per tonne to $15,7 per tonne. This is the price Minsk initially wanted. Russian oil companies are ready to restore supplies in the full amount of 480,000 bpd as soon as April 1.

At the same time, Minsk will pay part of the amount – $5 per ton. Russian authorities promised to “somehow compensate” the discount of $10,7 per ton to the oil companies. The deal with Belarus became possible due to the fact that Russia is preparing to terminate the agreement previously concluded under OPEC + on limiting oil production.

Later, Rosneft confirmed the resumption of oil supplies to Belarus. According to the indicative balance between the countries, in 2020 Russia can supply 24 million tons of oil to Belarus, that is, 2 million tons of oil per month.

The schedule for oil exports from Russia in the second quarter provides for the supply of almost 6 million tons to Belarusian refineries, although no contracts have been concluded. According to TUT.BY sources, “Belarus doesn’t need that much now. Resources are needed, in fact, to saturate the domestic market.”

Since the beginning of 2020, the five largest Russian oil companies (Rosneft, Lukoil, Gazprom Neft, Surgutneftegaz and Tatneft) have not supplied raw materials for processing to Belarus. The apple of discord is the size of the premium on the price of duty-free oil supplies.

Minsk insisted on the abolition of the premium, citing the rising cost of raw materials caused by Russia’s tax maneuver in the oil sector. Safmar Group companies, Russneft and Neftisa, are currently the only suppliers of Russian oil to Belarus.