Belarus, Russia oil impasse continues

Release Date: 2010-01-13

Source: www.RussiaToday.com

After days of talks on a new oil transit deal, Belarus still insists it should get crude from Russia duty free, even though it sells most of it to Europe for a large profit. Russia wants to shift to market prices with its neighbors but it’s reportedly ready to provide duty-free oil for the country's domestic use, in an effort to solve the crisis but 2009 ends without a deal

Last year Minsk enjoyed discounts on Russian oil worth $2 billion. In 2009 Belarus bought 21 million tonnes of Russian crude at a cheaper price than is made available to other nations and produced petrochemicals for export. Minsk was looking for a similar deal for 2010. Moscow says these terms are possible only for oil used domestically.

Belarusian oil demand in 2010 is expected to be about 8 million tonnes. Moscow has offered to sell 6 million tonnes duty-free – asking for full payment for exports to Europe. Minsk rejected the deal and even threatened to cut electricity supplies going through its power grids to Russian exclave Kaliningrad.

Failing to reach an oil agreement with Russia, Belarus said it could back out of the union. But analysts say the entity is more beneficial for Belarus than for Russia, as Minsk can use benefits from oil supplies and sell refinery products to the West for more competitive prices.

Type:

NORMAL