News2020.02.10 12:30

Belarus to buy Russian oil at 'global market' prices

RFE/RL 2020.02.10 12:30

Belarusian First Deputy Prime Minister Dzmitry Krutoy has been quoted as saying Minsk will pay "global market" prices for oil from Russia this year.

"The Russian side has agreed that Belarusian refineries will buy oil through agreements with Russian oil companies at prices that are set on the global market," Reuters quoted Krutoy as saying, according to Belarusian state BelTA news agency, on February 9.

Read more: Belarus calls for regular oil imports via Baltics as first shipment arrives in Lithuania

Belarus is heavily reliant on Moscow for cheap oil and billions in annual subsidies to prop up its Soviet-era economy.

Russian President Vladimir Putin and Belarusian President Alexander Lukashenko reportedly made little reported progress in talks in the Russian Black Sea resort of Sochi on February 7 on the increasingly intertwined issues of energy prices and closer integration.

Lukashenka had predicted that meeting would present a "moment of truth".

There was no official statement that emerged, but Putin’s deputy chief of staff Dmitry Kozak said late on February 7 that oil supplies, which Russia cut off at the start of the year, could be delivered to Belarus only at market prices.

He added that a deal had been reached to supply natural gas – which was also interrupted earlier this year but restarted – for this year at the same price as in 2019 – 127 US dollars per 1,000 cubic meters.

The unification talks pursuant to an unfulfilled 1999 agreement on forming a unified state have exacerbated tensions between the two and sparked protests on the streets of Minsk.

Lukashenko, who has been in power in Belarus for more than 25 years, has faced growing pressure from Moscow in recent years to agree to deeper integration under the unification agreement, which envisaged close political, economic, and military ties but stopped short of forming a single nation.

The two leaders in December were supposed to sign a series of road maps laying out concrete steps toward the union state, but Lukashenko balked.

Since then, Russia has sent strong signals to Minsk, mainly in the form of reduced oil supplies and higher prices.

Revenues from refined Belarusian oil products sold to European markets have long been a major economic driver for the country, which has a highly centralised economy with the exception of a few sectors.

US Secretary of State Mike Pompeo became the highest-level US official to visit Minsk in more than two decades on February 1. During the talks, which were characterized by US officials as cordial, Pompeo suggested that the United States could supply Belarus with plenty of oil.

Lithuania offers Belarus a way out

Vilnius, meanwhile, offered Minsk to import oil as well as LNG gas via the Klaipėda terminal and port. In late January, the first shipment of Norwegian oil bound for Belarus departed Klaipėda.

Read more: Lithuania nudges Belarus out of Russia's energy grip

On a visit to Belarus earlier in February, Lithuanian Foreign Minister Linas Linkevičius said Lithuania is interested in helping Belarus to preserve its sovereignty and look for alternative energy resources.

However, he stressed that the country's opposition to the Belarusian nuclear plant, due to become operation some 50 kilometres from Vilnius, has not decreased.

Lithuanian President Gitanas Nausėda also previously said that Vilnius would prefer a "long border with Belarus" and not Russia, with Linkevičius adding earlier in February that "their independence is our national interest".

Read more: US welcomes Lithuania's engagement with Belarus, FM says ahead of Minsk visit

The story originally appeared on Radio Free Europe/Radio Liberty. LRT English added the Lithuanian context at the end of the publication.

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