Amid falling world oil prices, Belarus was able to agree on Russian oil supplies without the disputed premiums. But compared to the previous year, the situation still worsened, the experts say.
After almost three months, “oil war” between Moscow and Minsk seems to be coming to an end. In January, we will remind, Belarus stopped receiving Russian oil and began to look for alternatives, because the export of petroleum products is the basis of the Belarusian economy. Now the Russian oil companies expressed their readiness from 1 April to resume full oil supplies to Belarus.
The main stumbling block in the conflict was the price of oil. Minsk insisted on the abolition of the premium to price of duty-free oil supplies, citing the rise in price in connection with the implementation of Russia’s tax maneuver in the oil sector. And now, on 24 March Prime Minister of Belarus Sergei Rumas said that “the Russian company will supply oil to Belarus without a prize”. Does this mean that Minsk won the “oil war” with Russia?
“Rosneft” can be left without orders from Belarus
According to the Belarusian Premier, the earlier the prize for Russian oil suppliers accounted for 11.7 per ton. “This award 7 dollars reduce company. That is, the company will supply oil with a premium 4.7 dollars. They will be resolved interbudgetary calculations. That is, the government will take these 4.7 dollars on himself”, – quotes Sergey Rumasa Agency “BelTA”.
The Prime Minister also commented on the statement of Rosneft, which is March 23 confirmed the resumption of oil supplies to Belarus at a premium of $ 5 per ton. “Belarus will choose the oil company, which will offer the best conditions for the supply of oil. For example, will provide more deferred payment. Well, the fact that “Rosneft” will be among the vendors. Priority will be those who in this difficult time for us, in the first quarter, supplying oil to our refineries without premium. This company Gutseriev, are still some small company. Other things being equal they will be the absolute priority”, – said Sergey Rumas.
The Director of the Center for economic research outreach Katherine Bornukovo said that the resumption of import of Russian oil for Belarus is very important because the lack of a stable supply had a negative effect on GDP. “However, much is still not clear. From the statement Rumasa not mean that there is an agreement with specific companies on the volumes and supplies”, – draws the attention of the economist.
Agree “helped” the crisis on world oil market
In any case, it is clear that Minsk and Moscow have reached a major breakthrough in the oil dispute. Belarusian experts believe that Belarus took advantage of the situation with the unprecedented drop in world oil prices by 30 percent, caused by the failure of the negotiations of the countries-members of OPEC with Russia and other partners on further reducing production volumes in the conditions of falling demand due to the coronavirus.
“You should thank the Saudis who brought down the world market and forced Russia to soften its position to save the markets,” says political analyst and founder of the consulting Agency Sense Analytics Artyom shraibman.
“One would expect that due to the sharp fall in oil prices and competition between Saudi Arabia and Russia for markets, Russia will go forward, after all, Russian companies benefit from having a guaranteed supply of oil to Belarus”, – said the expert in oil and gas issues Tatyana Manenok.
Belarus won, but as before will not be
As for the victory of Belarus in the “oil war” with Russia, the opinions of Belarusian analysts differ slightly, although all acknowledge that Belarus has made significant concessions. Artyom shraibman comments for DW says that in a dispute about the prizes of Belarus defeated completely. “But in these situations we need to wait for contracts because of the victory of Belarus said earlier” – the expert specifies.
Economist Katherine Bornukovo, in turn, recalls the continued implementation of the tax maneuver in Russia in the oil sector. “Cancel the award does not compensate us for the losses from the tax maneuver. Compared to last year, the situation still deteriorated, but without cancellation of the award would have been even worse,” – said Barsukova.
The economist also indicates that Belarusian refineries is unlikely to be profitable to process scheduled for 2020 amounts to 24 million tons, because of low world oil prices, export of oil products may become unprofitable. “Therefore, the government of Belarus is now calculating how much oil we actually have,” says Bornukovo.
Moreover, the Belarusian economy in any way suffer because of the pandemic coronavirus, so to recover quickly will not work, says Bornukovo. But most importantly, according to shraibman that Belarusian oil refineries will be loaded and you will be able to regain Ukrainian market of petroleum products, which Russia began to displace Belarus in recent months.
Alternative to Russian oil is still needed
The termination of deliveries of Russian oil at the beginning of the year forced the Belarusian leadership to think about the alternative of Russian oil. Considering options in the delivery of railway from the Baltic States, the reverse of Poland, through the pipeline “Odessa-Brody” through Ukraine. Belarusian experts hope that the search for alternatives Minsk will not give up.
The Belarusian government must analyze all the available market offers, the more that Saudi Arabia is ready to provide European companies discounts, says Tatiana Manenok. “Probably due to the cost of freight Russian oil will still be profitable: Saudi shipping negates the discount. But to curtail the search for alternatives is still impossible, because this encourages Russian companies to make concessions”, – said the expert. In any case, the new situation will make you wonder what volumes are required Belarus to buy oil is not the problem, the problem effective to recycle it.
Economist Katherine Bornukovo says that today the primary task is to download the refinery to prevent further decline in GDP. “Let’s hope that when the crisis is over, Belarus will return to alternative supplies, especially as the situation in the markets contributes to this,” says the economist.