Press digest

2020 May 18

US Sends Oil to Belarus, Seeking to Reduce Energy Dependence on Russia

The United States dispatched the first shipment of U.S. crude oil to Belarus last week, according to the State Department. Belarus has been seeking to diversify its oil supplies after Russia stopped shipping oil there when both countries failed to renegotiate the oil price for 2020.

The competitive deal is led by U.S. energy trader United Energy Trading which partnered with U.S. logistics company Getka Energy and UNIMOT, a Polish importer of fuel, gas, and electricity.

The 80,000-ton shipment is expected to arrive at the Lithuanian port of Klaipeda in June and from there will be sent by rail to Belarus.

The deal “strengthens Belarusian sovereignty and independence, demonstrates that the United States is ready to deliver trade opportunities for American companies interested in entering the Belarusian market, and fulfills the commitment the United States made to Belarus in February with government leaders in Minsk,” U.S. Secretary of State Mike Pompeo said in a statement on May 15.

Belarusian Foreign Minister Vladimir Makei said cooperation with the United States on oil is “an element of energy security,” according to The Associated Press.

“The United States urges Belarus to build on the progress it has made to increase the access of American businesses to its market and undertake the market-oriented, trade-liberalizing reforms necessary to advance its WTO [World Trade Organization] accession process,” Pompeo said in the statement.

Pompeo visited Belarus in February where he met with President Alexander Lukashenko and Makei, and offered for the United States to supply Belarus with all of its oil and gas needs at competitive prices.

In 2019, Belarus requested Russia to pay an increased tariff on Russian oil transit but Russia agreed only to a much smaller increase in tariff rates.

Belarus purchases crude oil from Russia, processes it in its two refineries, and sells refined products to Europe. In April 2019 Russia shipped contaminated oil which caused damage to Belarusian refineries, according to a report from the Institute for the Study of War. The tariff increase requested by Belarus was supposed to partially cover the costs of the damage.

Both countries were not able to reach an agreement on the tariff rate in 2019 and Russia stopped all oil deliveries to Belarus on Jan. 1.

Belarus then sought alternative oil sources and secured shipments from Norway, Azerbaijan, and Saudi Arabia.

Russia and Belarus later reached a compromise agreement and Russian state oil company Rosneft said on May 15 it expected to ship about 9 million tons to Belarus this year—about half the amount Belarus had bought in previous years.

According to the Institute for the Study of War, Belarusian President Lukashenko tried to reduce the country’s dependence on Russian oil to escape Russia’s intensified pressure on integrating Belarus “into Russia-dominated structures.”

In 1999 Russia and Belarus signed a supranational treaty to form a union state and integrate the economies of both countries, according to the European Council on Foreign Relations.