Minsk Doesn’t Reach Deal With Moscow, Will Import Oil From Norway

Belarus oil company BNK has bought 80,000 tonnes of crude from Norway via Lithuania’s Klaipeda port this month because of an ongoing supply row with Russia, Reuters reports.

“We expect the shipment, and will continue further negotiations then,” Belarus state company Belneftekhim said in response to a question from Reuters.

Some 80,000 tonnes of Johan Sverdrup oil will be delivered by rail to Novopolotsk Naftan refinery. According to Belneftekhim, the oil will be shipped via Lithuania’s Klaipeda port. Sources say that the delivery will cost Minsk much more than import through oil pipelines – transhipment and transportation to the plant by rail will cost more than $20 per ton.

belarus oil pipeline russia norway

The French Total could have become the seller of the oil brand, Reuters sources say. Deliveries to the Johan Sverdrup market began in the autumn of 2019 after the launch of the eponymous offshore oil field in Norway. The brand is a competition to Urals Oil in the European market because of its very similar quality characteristics.

Earlier it was reported that Klaipedos nafta is ready to transship oil for Belarus. Klaipedos nafta claims that it can transship up to 3 million tons of oil. Last year, Belarus imported about 18 million tons of oil from Russia.

Oil deal saga

Recall that Russia halted oil supplies to Belarus due to differences in the price of raw materials. Minsk insisted on cancelling the premium on the price of duty-free oil supplies, citing the rising cost of raw materials caused by Russia’s tax maneuver in the oil sector.

On the last day of 2019, Alexander Lukashenko held a meeting with the leadership of the Belneftekhim concern and instructed to begin supplying oil from alternative sources. First of all, by rail from ports in the Baltic, as well as alternative supplies via the Druzhba pipeline.

Moscow and Minsk had thus far failed to reach a deal on tariffs for the transit of Russian oil and petroleum products through Belarus, as Russia had asked for an oil price higher than the global average. The price of oil supplies from Russia is 83% of the world oil price. The size of the premium is 10 dollars per ton.

The annual transit of oil through Belarus to Europe is 60 million tons. However, last year, the volume was less due to an incident with poor oil. The countries have reportedly come to an agreement on approaches and methods of providing compensation for poor oil, no specific details were released yet.

Meanwhile, the OAO Gomeltransneft Druzhba has finished repairing sections of the Mozyr-Brest 3 oil pipeline. The company’s specialists replaced two sections of the pipeline and fixed several other dangerous defects revealed during an additional examination.

The transit of Russian oil via Belarus continues in normal mode now.