Belarus and Russia have agreed on oil supplies for 2021. But an alternative is in store

Moscow and Minsk have agreed on the terms of Russian oil supplies to the oil refineries in Mozyr and Novopolotsk next year. At the same time, Belarus will continue buying raw materials from alternative suppliers by sea.

 

 

Prime Minister Roman Golovchenko said that Belarus had signed contracts for oil supplies in 2021 with a number of major Russian suppliers. Russia, according to Golovchenko, is ready to supply "maximum volume" of oil, while the Belarusian party is ready to process "as much as IT is profitable for us. The benchmark for both sides is 18 million tons. "But everything will depend on the market situation," summed up the prime minister.

 

Russia and Belarus have approved a schedule of oil deliveries by pipeline for the first quarter of 2021. It envisages the Export of 4.5 million tons of oil to Belarusian refineries, a source in the industry told TASS.

 

Russian companies and Belneftekhim conducted several rounds of negotiations in the fall. Minsk proposed to revise downward the oil price, while some Russian exporters, particularly Rosneft, insisted on increasing it, three sources told Reuters. Nevertheless, the "price formula and supply volumes" remained at 2020 levels.

 

An important nuance is that the mechanism of inter-budgetary transfers in the calculation of oil with the Russian Federation in 2021 will not work, said Golovchenko. He spoke in favor of moving away from such "not very marketable instruments. In 2020, this mechanism will compensate Belarus for the premium to Russian oil suppliers included in the price of supplies.

 

Thus, under the current tax maneuver, the price of Russian oil for Belarus will increase in 2021. As Deputy Chairman of Belneftekhim Svetlana Gurina stated, next year, the cost of Russian oil for Belarus will amount to 88-90% of the global oil price. At the moment it is 85%.

 

Will there be oil from alternative sources?

In 2020 Belarus resumed supplies of sea oil due to the lack of imports from major Russian companies in the first quarter due to disagreements on price. "Belneftekhim carried out alternative imports from Norway, Saudi Arabia, Azerbaijan and the United States through the ports of Lithuania and Ukraine. According to the sources of TUT.BY, next year the purchase of tanker oil will be continued. The only focus is made on the delivery of raw materials through Ukraine to Mozyr oil refinery, as "logistics are better than through Klaipeda to Naftan," say the sources. The volume will remain the same - one tanker a month.

 

It is already known that the Ukrainian pipeline system operator Ukrtransnafta and BNK UK Ltd (a subsidiary of the Belarusian Oil Company) have extended the contract on the transit of oil for 2021. Director General of Ukrtransnafta Mykola Gavrilenko told Interfax-Ukraine news agency in an interview that the tariff and contractual terms between the parties for the next year comply with the current agreement. A certain discount on the tariff was requested from the Belorussian party. "If the volume increases, the tariff will decrease," Gavrilenko explained.

 

The Head of Ukrtransnafta also specified that BNK has already nominated one tanker for the first decade of January 2021. In general, by the end of 2020, the transportation of Azerbaijani oil from Odessa to Belarus amounted to 880 thousand tons.

 

"Ukrtransnafta" earned $13 million on the operation of the Azerbaijani oil purchased at a price drop in the spring of 180 thousand tons and its subsequent sale in November, said Gavrilenko. BOC bought 80 thousand tons of that oil.

 

In 2021, Russia and Belarus are yet to finalize an agreement on compensation for "dirty" oil, received by Mozyr Oil Refinery. "Belneftekhim also wanted to index the tariff for the transit of Russian raw materials through the pipeline Druzhba by almost 25% in 2021. But Moscow did not agree to it.