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December 5 – December 11, 2016

Russo-Belarusian gas and oil dispute unlikely to end soon

The situation has not changed

In December 2016, Belarus made an advance payment in repayment of the debt for natural gas supplies in 2016. The debt emerged because Belarus paid a lower price for the natural gas supply as compared with the contract price (USD 136.9 per 1000 cubic metres). In response, Russia unilaterally cut oil supplies as of July 2016, from 2 to 1.2 million tons of oil per month. Nevertheless, Russia is unlikely to resume oil supplies in full volume before the end of 2016. Belarus is unable to repay the debt for gas in full without additional borrowing. In order to solve the problem, the Finance Ministry and the National Bank are likely to issue foreign currency bonds worth at least USD 350 million.

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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.
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