Russia halts oil deliveries to Belarus refineries on no supply deal

Moscow — Russian crude deliveries to Belarusian refineries have been suspended since January 1, a spokesman for Russian pipeline operator Transneft said Friday, after the former Soviet republic failed to agree on terms of crude Russian deliveries for 2020.

He added that transit of Russian crude via Belarus to the Baltic Sea and Central Europe was unaffected by the halt in supplies.

The suspension comes after Russia and Belarus failed to agree on a new oil supply deal by the end of 2019, when the previous agreement expired.

Belarus' two refineries -- the 240,000 b/d Mozyr plant and the 190,000 b/d Naftan facility -- are both supplied with Russian Urals crude via the Druzhba pipeline to Central Europe.

Belarusian President Alexander Lukashenko previously indicated that a temporary agreement would be introduced, with negotiations to continue after the Russian and Belarusian winter holidays are over -- January 8 in Belarus and January 9 in Russia.

In late December, Lukashenko also ordered companies to establish alternative delivery options, including via rail from ports on the Baltic as well as reverse deliveries via the Druzhba pipeline.

The Druzhba pipeline is a key element in Russia's crude supply chain via Belarus and Ukraine into Poland, Hungary, Slovakia, the Czech Republic and Germany.

In an interview with Russian radio station Echo of Moscow, Lukashenko said that if no agreement were reached, Belarus might reverse pump oil to Belarus from Poland, confiscating two lines of the Druzhba network to do so.

Polish oil flows normal

In recent years, Russia and Belarus have had several disputes over energy supply volumes and prices. Russia has recently been pushing for greater economic and political integration with Belarus, which has increased tensions between the two countries.

In mid-December, Russian media quoted Lukashenko saying that Russia had agreed in principle to supply 24 million-25 million mt of oil in 2020.

Speaking on December 20, Lukashenko said he expected prices to be no higher than in 2019 and to be agreed within days.

On January 1, Gazprom said that it had agreed to extend its gas supply and transit contracts with Belarus until 2021 and signed a protocol on the pricing procedure for gas supplies in January and February.

Polish state crude oil pipeline operator PERN said Friday that Russian imports into Poland were flowing normally.

"At this moment, oil supplies through the Przyjazn pipeline to Poland are in accordance with the schedule, without interruptions," PERN said in a statement.

Poland's main Plock refinery and refineries in Germany are supplied by the northern branch of the Druzhba pipeline, which is called Przyjazn in Polish.

--Rosemary Griffin, rosemary.griffin@spglobal.com; Adam Easton, newsdesk@spglobal.com

--Edited by Jonathan Dart, newsdesk@spglobal.com