Russia halts oil to Belarus, but transit to Europe still flowing

Russian pipeline operator Transneft said Russian oil companies have not sent any oil to Belarus since Jan. 1, the TASS news agency reported

Russian President Vladimir Putin gestures during his meeting with business community at the Kremlin in Moscow

di Andrei Makhovsky and Olga Yagova

Moscow - Russia has halted oil supplies to refineries in Belarus, the Belarusian state energy firm said on Friday, amid a new contract dispute that is also threatening large Russian oil deliveries to Western Europe crossing the country. Belarus's state firm Belneftekhim said deliveries had been halted as of Jan. 1. Two trading sources told Reuters Russian oil transit to Europe via Belarus was so far continuing uninterrupted. Europe receives around 10% of its oil via the transit link, known as the Druzhba pipeline, which can supply more than 1 million barrels per day to countries including Germany, Poland, Slovakia, Hungary and the Czech Republic. Moscow and Minsk have had several oil and gas spats over the past decade, in what has been described as a love-hate relationship between presidents Vladimir Putin and Alexander Lukashenko.
Putin and Lukashenko have repeatedly toyed with the idea of political integration of the countries, but the autocratic Belarusian leader who came to power in 1994 has backtracked repeatedly. Russia has cut subsidies to Belarus over many years and is now charging close to international prices for oil and gas, but contracts negotiations are often protracted. "Deliveries have been suspended... Plants are reducing their workload to the technical minimum," a spokesman for Belneftekhim said.

PETROLEUM PRODUCTS

Russian pipeline operator Transneft said Russian oil companies have not sent any oil to Belarus since Jan. 1, the TASS news agency reported. "Since Jan. 1, we have not had any applications from oil companies to deliver to Belarusian refineries. However, oil transit through Belarus is continuing in full volumes," Transneft spokesman Igor Dyomin was cited as saying. It was not clear when Moscow and Minsk could resume talks on their 2020 contract. Russia is on a long New Year holiday until Jan. 9. Belneftekhim said on Friday it had temporarily suspended the export of petroleum products as of Jan. 1. "A decision was taken to temporarily suspend the export of petroleum products and oil," the spokeswoman said. "The decision has been in place since Jan. 1. We are not currently voicing the length of time that the suspension will be in place."
Belarus exports around 12 million tonnes of petroleum products annually, primarily to Ukraine and Poland, data from state statistics agency Belstat showed. In the first 11 months of 2019, imports from Belarus made up 35% of Ukraine's diesel fuel market and 36% of its petrol market, according to Ukrainian consulting group A-95. Belneftekhim said it would fulfil its petroleum product export requirements despite the suspension. "There's some delay in fulfilling (petroleum product export) obligations," the Belarusian news agency Belta cited Belneftekhim's deputy head Andrei Bunakov as saying. "The measures we are taking will allow us to fulfil these requirements." Belarus also has enough petroleum product reserves to supply its domestic market in January and beyond, with no threat of a deficit in supply, Bunakov was quoted as saying.

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