Russian companies may supply up to 2 million tons of oil in April

By Anatol Pankouski

The prospects of Russian oil supplies to Belarus in April remain unclear despite allegedly signed agreements. Amid apparent resolution of the issue of the premium, the parties interpret the price of supplies in April differently as the size of deliveries remains unchanged.

There are so many controversial interpretations of the details of the agreements reached by Belarus and Russia that it is currently difficult to say anything specific about the terms of the deal. Both sides agree that the likely volume of deliveries would be up to 2 million tons, which, however, is nothing new, given that such monthly volumes were agreed in late 2019. It is also known that large Russian oil companies, at least Rosneft, have joined the agreement.

As for the premiums, the parties appear to have agreed, but the full picture is blurred. The head of the Belarusian government, Rumas, has claimed that Belarus will not pay premiums to Russian suppliers, which were reduced to USD 5 from USD 10-12 per ton. According to him, the Russian government will reimburse these USD 5 through an intergovernmental transfer. Russian Ambassador Mezentsev has said that reimbursement is anticipated, while the Russian Finance Ministry has not yet confirmed its readiness to make such reimbursement.

The price of oil supplies appears to be the most controversial issue. Rumas has said that Belarus will buy oil at USD 4 per barrel in April, while Russia yet must confirm this.

Another uncertainty concerns the end term of the agreements. It cannot be ruled out that extremely favorable terms of oil supplies to Belarus would be valid only for April, given that the domestic market has become more profitable for Russian oil companies than the world market.