Belarus halts fuel exports as Russia cuts off crude supply

Belarus has suspended exports of oil products after the halt of crude supply from Russia forced it to curb production at its refineries.

Belarus, which has traditionally relied on Russia for crude, is now running its refineries at minimum rates. Transit of Russian crude to European buyers across Belarus territory continues, according to Russian news service Tass.

“The resulting situation is not the best stage in the economic relations with our Russian partners,” state-owned Belneftekhim said in a statement. Belarus will now use stockpiled crude to meet domestic demand for fuels and is looking for other sources of crude supply for its refineries, Belneftekhim said.

Russia and Belarus have been at odds over transit fees and oil supply for months, with the two nations yet to agree on compensation for the contaminated crude which was delivered to refineries in Belarus via the Druzhba pipeline earlier last year. Belarus fuel exports dropped by almost 15% in the first ten months of 2019, according to the nation’s statistics service.

Belarus asked Russia to consider a single oil delivery from independent producers to replenish Belarusian refineries’ crude storage while the countries work out a new deal, a person familiar with Russia’s position said Friday on condition of anonymity.

Belarus, which receives the supply for the Mozyr and Naftan refineries, also says it stands to lose from Russian tax changes that have been gradually been brought in by President Vladimir Putin. A series of calls between the countries’ leaders earlier this week failed to broker an agreement.

Before the Druzhba contamination crisis, the volume of crude to be sent to Belarus refineries was set at about 18 million tons. That’s just over 361,000 barrels a day. Belarus also previously had an allocation of crude for re-export, thus benefiting from the export duty, but Russia has decided to no longer provide oil on those terms.

Polish network operator PERN said Friday it experienced no disruption in oil delivery via Druzhba. Gomeltransneft Druzhba, which operates the pipeline that runs through Belarus in the direction of Poland and Ukraine, didn’t respond to calls for comment.

A significant proportion of Russian supplies of crude oil and natural gas to Europe transit through former members of the Soviet Union that are now independent countries, albeit with powerful economic ties to Moscow. A dispute with Ukraine threatened gas flows until the nations reached a deal late on Monday.