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October 24 – October 30, 2016

Minsk demonstrates lack of interest in Kremlin integration initiatives

The situation has not changed
Minsk demonstrates lack of interest in Kremlin integration initiatives

Amid diminution in benefits from participation the Russian integration projects, Minsk has demonstrated to the Kremlin reduced interest in the Eurasian integration. Apparently, Belarus is discontent with additional requirements put forward by Russia in order to resolve the oil and gas dispute in full. Minsk is likely to find additional arguments for pushing its interests in the oil and gas sector, such as strengthening energy cooperation with the EU and demonstrating attempts to diversify energy supplies.

Free economic zones halt the signing of the Eurasian Economic Union Customs Code.

Amid economic decline in the post-Soviet space, disagreements and mutual claims have grown among the EEU members. President Lukashenka has once again criticised the EEU and insisted on better access to the Russian energy and to the Russian market for Belarusian products. The decline in resources due to the economic downturn in Russia is likely to limit the Kremlin’s financial capacities even further and is likely to prompt Moscow to pay more attention to Minsk’s oil and gas unearned income.

The meeting behind closed doors between President Lukashenka and the day before between PM Kobyakov and Russian Prime Minister Medvedev aimed to resolve the oil and gas dispute. Due to the absence of official media reports, the negotiations have resulted not in Belarus’ favour. Perhaps, the Kremlin is attempting to set additional conditions to resolve the tension over Russian energy supplies. For instance, Russia insists on redirecting oil transit from the Baltic to the Russian ports and on supplying petroleum products processed at Belarusian refineries to Russia, which makes no economic sense for Belarus. Earlier, the Kremlin sought implementation of the agreements on five integration projects, which aimed for the privatisation of large Belarusian state-owned enterprises in favour of the Russian business.

Minsk appears distrustful of the prospects for long-term cooperation with its closest ally and searches for additional sources of oil supplies to Belarusian refineries. For example, a test supply of Azerbaijani oil was shipped to the Mozyr refinery and analysts believe this could be a replacement for the Russian oil after Russia completes the tax manoeuvre in 2017. Minsk is using Azerbaijani oil as an additional lever of pressure on Russia in the final settlement of the Russo-Belarusian oil and gas tension.

Overall, Minsk is likely to deter the Kremlin’s post-Soviet integration initiative if Russia further reduces benefits from rapprochement.

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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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