Aliyev's visit marked the end of Venezuelan oil supply project

Category status:
April 22, 2016 18:17

During the visit, many agreements on cooperation between the two countries were signed. However, their insignificance and the low foreign trade level between the two countries suggests, that the main purpose of the visit was to close the biggest deal between the two countries in recent years: cooperation on oil supply using swap schemes.

On August 28-29, Azeri President Ilham Aliyev visited Belarus and met with Alexander Lukashenko.

There is a broad list of agreements signed during the visit, but the most important is the inter-governmental agreement on the creation of favorable conditions for the leasing expansion. The remaining agreements are mostly formal and could be signed by other high level officials. A statement about joint export to third countries is not more than a declaration of intent. 94.5% of Azerbaijan’s export (USD 26.6 billion) is energy products. Azerbaijan hardly needs assistance of Belarus to export its gas.

It would be difficult to maintain upwards dynamics in foreign trade. Excluding oil supply, in 2011 imports from Azerbaijan totaled USD 9.3 million; in 2012 Azeri oil supplies have been suspended and imports were worth about USD 6 million in the first five months. Exports from Belarus to Azerbaijan increase, but even overcoming the USD 200 million threshold will not help keeping up the bilateral trade volume achieved in 2011.

Currently further cooperation using swap schemes is impossible. Venezuelan oil price is well above the price of Russian oil in 2012. Capacity of Belarusian refineries reached 100% and there is no economic feasibility for oil supplies using a difficult route. Moreover, experts raised many questions regarding oil supplies using swap agreements due to the supplies’ inarticulate logistics. Tankers demurrage and Azeri oil shipping via suboptimal routes significantly undermined the deals’ economy.

Therefore the visit of Ilham Aliyev probably marked the end of multilateral cooperation on oil supplies. Recent visit of President Lukashenko to Venezuela in a way ended one part of the deal, and the visit of the President of Azerbaijan put an end to the entire project.

Similar articles

Belarusian and Ukrainian Defence Ministries entangle in confrontation spiral
October 02, 2017 11:57
Фото: RFRM

Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.

The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.

Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.

For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.

Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.

The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.

Recent trends