Ukraine starts oil transit to Belarus

Ukrainian company Ukrtransnafta has started oil transit to Belarus. The Azeri Light grade Azerbaijani oil is delivered to Mazyr refinery. The oil is pumped through the Odessa-Brody oil pipeline.

The oil is transported to Belarus under an agreement between Ukrtransnafta and BNK (UK) Limited (UK), a subsidiary of the Belarusian Oil Company.

Under the contract between Ukraine and Belarus, Ukrtransnafta received two oil tankers with Azerbaijani oil. Unloading of the first tanker was completed on March 14, and the second one — on March 17.

At the end of 2019, Belarus was unable to conclude oil contracts with major Russian suppliers. The problem was that previously the cost of oil for Belarus was calculated by the formula “market value + premium to suppliers”. However, given the implementation of the next stage of the tax maneuver by Russia, the price of Russian oil for Belarus has increased (according to Belneftekhim, now the price is about 83% of the world price). Under these circumstances, Minsk considered the old oil formula unfair and refused to pay the premium.

As a result, in January-February this year, only the companies of Mikhail Gutseriyev, who have friendly relations with Alyaksandr Lukashenka, supplied oil to Belarus. Over the past two months, domestic refineries have been operating at minimum load.

Vladimir Putin, after a meeting with the head of Belarus, promised to remove restrictions on access to the pipeline for companies interested in working with Belarus. Now the Belarusian government hopes for interest in cooperation with our country of small and medium oil companies.

Diversification of oil supplies is one of Belneftekhim’s priorities for 2020.