The situation with the pandemic coronavirus infection Covid-19 pushed into the background most of the existing global and regional agenda. In reality, however, issues of economic and political issues have not disappeared and continue to influence the development of interstate relations.
In particular, for Belarus, where the economy continues to suffer one blow after another, one of the main themes continues to be oil and gas cooperation with Russia. The authorities of the Republic, has long refused to compromise with the Russian oil companies on the price of oil, currently have a great opportunity to get gnarly is just what normally they could hardly count. However, analysts believe that this does not mean that it lasted for several months, the Russian-Belarusian conflict will soon be fully resolved.
It is worth mentioning that since the end of 2019 Minsk and Moscow could not come to compromise on issues about the conditions of Russian oil supplies to Belarusian refineries. In Belarus believed that the background of the tax maneuver in the oil industry of the Russian Federation, as well as the mechanism of the so-called perenoski oil in the Republic shall be supplied with an even greater discount than was stipulated in previous agreements. Despite the fact that in 2020 the country had to buy Russian raw materials at a price about 17% below average, Minsk insisted on the reduction or full waiver of premiums to Russian suppliers. At the same time was not exactly clear what amount is owed to oil companies for delivery to Belarus. Called by various figures — from $ 15 to $ 30 per ton. According to Alexander Lukashenko, prizes and does not need to be paid to those who sell the raw material.
“Pay a premium, those who buy. If we buy a product, motivate you give us a bonus. No. Why? Because there is no normal rules. The law of force to tilt to get. This is normal,” — said the Belarusian leader.
It was his tough stance, he explained that no longer wants “to kneel” and succumb to pressure to further integration within the Union state, was the main reason for the prolonged months of the oil conflict.
Furthermore, this intransigence of the Belarusian leader, which had no economic justification has led to the fact that the Republic started to purchase the notoriously expensive oil in Azerbaijan and even Norway, pointing to the need to diversify supplies. In the end, the Belarusian refineries are able to upload their power is only half, worked in the first quarter of 2020 at a loss. In January — March the volume of oil refining at the plants in Novopolotsk and Mozyr was only about 3 million tons, of which the Russian companies put a little over 1 million tons. A large portion of supply from Russia came in the company of “Safmar” Mikhail Gutseriev, having a long Association with Alexander Lukashenko and agreed to work on the Belarusian conditions.
As you know, the situation in Belarus changed pandemic coronavirus and the actions of leading oil producers. Due to the sharp fall in world oil demand and the failure of the agreement of Russia with the countries of OPEC black gold has become a very cheap commodity, which the market has become much more than required. The situation has touched absolutely everyone, including Russian companies, which became necessary to seek additional markets for its raw materials. In the circumstances, Belarus has evolved into a highly desired partner. You may recall that another agreement 2017 Russia undertook to deliver to the Republic of about 24 million tons of oil that was repeatedly pointed out in Minsk, accusing the Russian partners of failing to honour its commitments.
Moreover, by the beginning of April it became clear that the situation with falling oil demand and its low cost may be delayed and result in significant losses of Russian companies. For example, the price of Urals in Northwest Europe on the supply conditions cif (Cost, Insurance and Freight) in Rotterdam on 1 April reached $ of 10.54 per barrel, the lowest level since March 1999. At the same time, as noted by energy Minister Alexander Novak, the cost of oil on a long-used fields is around $ 3-7 per barrel, and new — in the range of $ 15-20.
Despite the confident tone of the Russian authorities that the country can survive an era of low hydrocarbon prices long enough, the situation in the oil dispute with Belarus showed a completely different reality. It turned out that Russian oil companies are ready to sell Belarusian oil refineries are almost the same conditions that demanded in Minsk. The authorities of Belarus did said that now they will decide with whom they will contract.
“We will now determine which companies you will supply oil. He called me and said: “Alexander G., do not argue, if already so, I agree”. But we have the same conscience. He’s one worked at the risk… Now threw it away and said, “No, will supply LUKOIL, Rosneft, Surgutneftegaz and others. We’re going to determine“. Let you, marketeers, always pushed us to agree with them. Why should you define? We pay money, we will hold the tender,” — said Alexander Lukashenko.
And his words convinced many that today Minsk has all the chances in the short term to declare a formal winner in an existing dispute.
The day of unity of peoples of Belarus and Russia is the next stage in the Belarusian-Russian oil relations. If up to this point, the parties noted that the terms of the supply of oil will still be consistent, that on April 2 in Minsk, and in Moscow, there were statements that many observers were quick to call the end of the confrontation. However, it is worth noting that the current rhetoric of the parties is still not possible to look at what is happening so optimistic.
Thus, initially, the Prime Minister of Belarus Sergei Rumas said during a conversation with journalists has informed that in April the Minsk expects to receive 2 million tons of Russian oil without a premium.
“This tough and consistent policy of the head of state about the purchase of oil without premiums aged by the government. The result of this position — the price at which we buy oil in April — about $ 4 per barrel,” he said.
And this statement, in fact, meant that Belarusian oil refineries get Russian raw materials practically free of charge, paying to the supplier the transportation of raw materials on the oil pipeline “Friendship”. It should be noted that the $ 4 per barrel, or $ 29,3 per ton, is 12 times cheaper than the price at which Belarus buys Russian oil in 2019. If we turn to the national statistics Committee, last year the average price of imported Republic of 18 million tons of Russian raw materials accounted for about $ 364 per ton, and the barrel was worth about $ 49,6.
However, in response to the statement of the Belarusian side, the press Secretary of the President of Russia Dmitry Peskov still asked Minsk not to jump to conclusions, Recalling that Belarus will not be able to buy oil at the announced price, if there is no appropriate market supply. In addition, to save face tried and the Ministry of energy of the Russian Federation. In his interview to “echo of Moscow” Alexander Novak hesitantly stated that “the supply of oil, of course, be in accordance with the price formed on the market, minus export duties, as we have between our countries deliveries are duty-free”.
“So, well, I guess I incorrectly, so to speak, to adjust the words of the Chairman of the government of Belarus. I probably would have just said that… that’s commented on, at what price will be delivered, — it is the market, respectively, minus the export duty and five dollars,” he said.
In addition, a similar position was taken in Rosneft, where, until recently, flatly refused to take the conditions of the Belarusian side, however, from 3 April to sign a contract on the shipment of raw materials. According to the company, “the delivery will be made on the terms on which the company reported earlier — that is, with a premium of $ 5 per ton”. Neither the energy Ministry nor Russian companies have been unable to answer, who ultimately will pay the prize suppliers.
If you believe the Belarusian side, to compensate the payment of premiums Belarus will be the Russian budget. That’s about it in March said the Belarusian Prime Minister.
“All Russian companies will be able to supply oil without a premium. From this award, $ 11,7 per tonne, $ 7 lower, the company the remaining us $ 4.7 be settled inter-budget calculations. That is, the Russian government will take this $ 4.7 myself,” said Rumas.
If you recall the last position of the Russian government there has rejected such options. This, in particular, said Deputy Finance Minister Alexei Sazanov. According to him, “if this is the premium oil companies, then it should oil companies to ask”, and the Ministry of Finance does not conduct any work for compensation and not familiar with such plans.
Despite the above challenge, concern “Belneftekhim” on 3 April reported that Belarusian oil refineries have started to conclude contracts with Russian oil companies for the price of $ 4 per barrel. Analysts believe that this statement suggests that in the Wake of the current crisis in Minsk for a time still managed to beat Moscow. Moreover, the Belarusian authorities have reached that a few months ago, it was difficult to imagine — against the wishes of Moscow the issue of the oil cooperation was untied from the problems of further integration within the Union state. This is actually confirmed by Alexander Lukashenko, who said that he agreed with Vladimir Putin to postpone and not to discuss the so-called 31st road map, which includes the creation of supranational bodies of the Union state.
“If we don’t solve the issues of people’s lives and businesses, which today are on the agenda, of which 31 of the map we can talk about what the single currency and the Tax code can we talk?” — said Lukashenko, noting that “we need to solve today’s issues.”
In addition, in Minsk unambiguously stated that the parties can return to discussion of further integration only after oil and gas dispute. As noted by the Belarusian Ambassador in Russia Vladimir Semashko, “the solution of problematic issues of bilateral cooperation creates preconditions to resume consideration of the elaborated documents on deepening our integration.” According to him, “it is obvious that the road map will have to be updated because of the inherent timing of the implementation of stages of integration were originally very compressed”.
“And indeed the situation in our region and in the world that has developed in recent days and weeks, forces us to rethink certain elements of cooperation and adjust them to conform to current realities,” — said the Belarusian diplomat.
It is worth noting that at the end of the oil conflict between Belarus and Russia today do not even believe in the Minsk well aware that concessions to Moscow went only because of the current crisis. According to the same Semashko, the exclusion of bonus payments from oil prices solves the problem only for the current year and only if the price of oil will not exceed this year $ 40-45 per barrel.
“In the future, solving the problem of creating a common market of oil and oil products of the Union state, Belarusian and Russian refineries must have exactly the same terms of compensation costs from the tax maneuver,” he stressed, Recalling that in the Belarusian capital is expected to complete the creation of integrated energy markets in the Eurasian economic Union.
It is, in fact, suggests that once the price of oil will go up again, the conflict may flare up with new force. And this can happen in the near future, given how in the last days reeling oil market. Suffice it to recall that only after the statement of US President Donald trump about his conversation with the Arab sheikhs and of the proposal of Saudi Arabia to convene an emergency meeting of OPEC+ on the issue of the agreement on the reduction of oil prices for the black gold began to rise.
Thus, to say that the oil dispute between Belarus and Russia is over, now is entirely premature. Today just took some respite, although Minsk may indeed consider yourself at this stage a winner. However, this does not mean that as soon as the situation on the oil market will begin to change, Moscow again will not resume the pressure to stop that the Belarusian authorities will be extremely difficult. Russia is not used to losing, even in disputes with its closest allies, and try to regain lost positions today. It will end for Belarus, today, to predict difficult enough. But one thing is clear — in front of a side still waiting for complex negotiations and end a dispute may be brought only when the economic feasibility of oil and gas cooperation between the two countries will outweigh the political and ideological aspects.
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