Belarus may buy oil with delivery through Ukraine

First Deputy Prime Minister of Belarus Dmitry Krutoy said that the government continued to search for alternative oil supply routes. This was reported by BusinessCensor with reference to the BelTA media.

“We sent out relevant commercial offers. All commercial services of our factories, Belarusian Oil Company are in negotiations almost daily. I think that soon we will receive alternative options for the supply of specific oil here as well”, he said.

Belarus considers such countries as: Ukraine, Poland, the Baltic countries, Kazakhstan, and Azerbaijan.

Since the end of 2019, Belarus and Russia have not been able to agree on the conditions for the supply of Russian oil to the Belarusian refineries.

To recap, Belarus introduced an environmental tax on the transit of oil and oil products and suspended the export of its own oil.

As reported, countries could not agree on the cost of oil transit. On January 1, 2020, Russian companies stopped supplying oil, but already on January 4, Belneftekhim announced the conclusion of its first contract this year with a Russian oil company.

Ukraine, as well as Lithuania, is an importer of oil in significant quantities and there are simply no free volumes of raw materials for export in countries. In Ukraine, prices for domestic oil are formed as a premium to European quotations and as a result are much higher than in Belarus, which pays a price for Russian oil that is lower than the world level of the Russian export duty, so, on average, Belarusian refineries saved $ 50-60/t during 2019.

As a result of the “tax maneuver” in the Russian Federation, the export duty will gradually decrease along with the corresponding savings opportunity for Belarus, which will start purchasing Russian oil at European prices in 2024. Even taking into account the premium to European quotations of $ 6/t, around which the confrontation between Belarus and Russia in the oil sector is taking place, Russian oil for Belarusian refineries is still the most economically attractive today with a huge margin from the prices on the international market. Therefore, in the context of Ukraine, as well as the Baltic states, the letter of the Belarusian First Deputy Prime Minister most likely refers to the organization of services for oil transit through Ukrainian and Baltic offshore oil terminals and rail transportation by the territories of the aforementioned countries for Belarusian oil refineries, Kosatka.Media’s expert in the field of oil and petroleum products Yurii Niemov explained in a comment. About oil from Azerbaijan: it can be sea deliveries through Ukrainian ports, and Kazakhstan can theoretically supply oil to Belarus using several modes of transport.

Tags: contracts, oil, legislation, EU, Top management, energy market, RF, Oil refinery plant, foreign affairs, oil transit, monopoly, negotiations, Ukraine, volumes, oil products, oil deliveries

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