Belarus says Russia agrees to crude supply terms: report

Moscow — Russia fully supports Belarus' terms for crude supply in 2020, Belarusian news agency Belta reported Saturday, citing Igor Sergeyenko, the head of Belarus' presidential administration.

Sergeyenko's comments indicate that Russia may be close to resuming crude deliveries to Belarus at full planned volumes. Disagreement over supply terms has disrupted deliveries since the start of the year and led Belarus to seek alternative suppliers.

Sergeyenko was speaking during a meeting on Belarus' refining sector attended by oil company representatives and led by President Alexander Lukashenko.

Separately. the Russian government said Saturday that the two sides have reached agreements that will allow for deliveries in full to Belarusian refineries. The statement was released after Russian Prime Minister Mikhail Mishustin and his Belarusian counterpart Sergei Rumas discussed the issue.

"The heads of government noted the achievement of principle agreements on the parameters of cooperation in the oil sector, taking into account the mutual interests of both parties. Implementation of these agreements will ensure supply of Russian oil to Belarusian oil refineries in full and on the agreed terms," the Russian government said in the statement.

Supply volumes

It is unclear when these deliveries may resume and at what volumes. In December, Lukashenko said Russia had agreed in principle to supply 24-25 million mt of oil to Belarus in 2020. Russian pipeline operator Transneft said in mid-January that it expects supplies of Russian crude to Belarus this year to be 23.5 million mt, based on bids from Russian crude producers. Transneft said that these companies have not requested any amendments to these bids, despite a significant drop in supplies at the start of this year. Producers may ship increased volumes in future to compensate for the reduced shipments in early 2020.

Russia reduced deliveries to Belarus by 76% year on year in January and February. Deliveries totaled 709,100 mt, against planned volumes of 3.85 million mt, according to data released by the Central Dispatching Unit of the Russian Energy Ministry in early March.

Deliveries fell as a result of a dispute over Belarus' revenue from oil customs duty, which was set to fall significantly in 2020 as a result of changes to Russian taxation.

Lukashenko said previously that Russia has now offered a mechanism to compensate in full for the expected oil duty losses in 2020.

The dispute led Belarus to discuss crude deliveries with alternative suppliers, on both a temporary and long-term basis. Since the beginning of the year, it has received shipments from Norway and Azerbaijan. It has also discussed possible supplies with the Baltic states, the US, Saudi Arabia, the UAE, Kazakhstan and Ukraine.