Belarus may refuse Venezuelan oil supplies

April 22, 2016 18:11

Belarus is ready to abandon its project on alternative oil supplies to Central Europe. Preferential conditions for Russian oil deliveries make Belarusian authorities to reconsider the restoration of the full energy dependence on Russia.

In today’s economic situation, there is no reason to import that oil”, Vladimir Semashko said to the state news agency Belta. However, he said, the final decision about this had not yet been made. “President has the last word”, he said.

Belarus started importing Venezuelan oil in 2010. In 2011, under a swap scheme between Belarus, Azerbaijan and Venezuela 974 tons of crude oil was delivered to Belarus from Azerbaijan via the Odessa-Brody pipeline for USD 816.48 million overall. The average price of imported oil was USD 838.3 per one ton.

Moreover, in 2011, 1.315 million tons of oil worth USD 1.127 billion was delivered to Belarus directly from Venezuela by tanker through Estonia and then by train. The average price of imported oil was USD 857.2 per one ton.

This year, Belarus was not importing oil from Azerbaijan. Deliveries from Venezuela have been noticeably reduced: in Q1 of 2012 Belarus imported 136 thousand tons worth USD 127.749 million from Venezuela. The average price of imported oil was USD 939.3.

Simultaneously, in Q1 of 2012 Belarus imported 5.4 million tons of oil worth USD 2.386 billion from Russia. And the average price of imported Russian oil was USD 442 dollars, which is 2.1 times cheaper than the average Venezuelan oil supplies.

Improved conditions of Russian oil supply due to the abolition of fees, allowed Belarus to dramatically increase the supply of petroleum and petrochemical products to foreign markets. Thus, the export of Belarusian oil products increased in January-April 2012 as compared with identical period in 2011 by 62.8% to USD 5.443 billion; the export of diluents and solvents increased by 7.3 times up to USD 1.705 billion, and export of lubricants increased by 43 (!) times up to USD 590.926 million.

It could be assumed that Belarus exports petroleum products in the guise of thinners, solvents, and lubricants in order to reduce export duties due to Russia.

For reference. According to the National Bank of Belarus, in 2011 Belarus paid USD 3.07 billion in export duties on oil products to Russia, and in January-April 2012 – USD 1.473 billion.

Russian Ambassador to Belarus Alexander Surikov said on June 6 that Russia was investigating the causes behind growth of solvent and diluents exports from Belarus. One should anticipate that in the long term Russia will force Belarus to show the real export volumes of petroleum products, and therefore to pay export duties due to Russia in full.

On the other hand, it could not be excluded that customs duties are distributed between Russia and Belarus (for example, 85% of duties are credited to the Russian budget, and 15% - to the Belarusian budget.)

In terms of expansion of energy cooperation between Belarus and Russia, it should be noted that in 2013 an increase in natural gas transit via Belarus by 34.8% up to 60 billion cubic meters has been projected. Gazprom transit costs will be USD 570 million. This forecast has been made for the Gazprom’s shareholders meeting. It is obvious, that if the transit of Russian gas via Belarus is increased, gas transit via Ukraine will be reduced.