Will Putin force Belarus to use Russian ports to transport oil products?

Russian Ministry of Transport has declared that the redirection of Belarusian oil products from the Baltic ports to Russian ones will begin already in 2017. Earlier, the Belarusian side expressed doubts about the economic attractiveness of this route and stated that it was not going to give up the Baltic direction.

At the moment Belarus is transporting oil products produced from Russian raw materials mainly to the Baltic ports — Ventspils, Klaipeda, and Muuga. Moscow wants the products to be transported through the Russian ports, but for the Belarusian side it is unprofitable — the Baltic ports are closer and offer lower tariffs.

In August, Russian President Vladimir Putin actually proposed that Belarus use Russia’s infrastructure. He wanted it to be embedded in oil supply contracts.

In October, Belarusian Deputy Prime Minister Uladzimir Syamashka assured reporters that Moscow’s demand was not an ultimatum.

Uladzimir Syamashka

According to Syamashka, Belarus has no right to lose even one cent on every ton of processed oil.

But already on October 21, Deputy Transport Minister of Russia Viktor Olersky told reporters that transportation of some of the oil products from Belarus via Russian ports will begin this year. However, the official did not specify the volume of oil products in question. According to Olersky, the Russian transportation prices, if discounts are considered, are comparable with the Baltic ones.

In a conversation with belsat.eu, an expert in oil and gas Tatsiana Manyanok notes that Minsk has never ruled out the possibility of using Russian infrastructure, but only in case of economic expediency of this step. But even the substantial discounts promised by the Russian do not make Russian infrastructure more attractive than the Baltic one.

The expert notes that this kind of proposal from Moscow looks absolutely unfounded. Moreover, not everything in this case depends on Minsk — by putting its petroleum products up for sale, the “Belarusian Oil Company” offers buyers several transportation routes to choose from, including the Russian one. But no one chooses the Russian route — the ports of the Baltic countries are more profitable for buyers.

Therefore, the expert doubts that Belarus can abandon a very profitable Baltic logistic corridor.

According to Tatsiana, Russian companies are very interested in Belarus using the Russian direction.

Russian experts also doubt that Minsk could be forced to completely abandon the Baltic corridor.

It should be noted that the largest oil terminal in the port of Ust-Luga is controlled by the Ust-Luga Oil company, which is associated with Gennady Timchenko, billionaire and Putin’s friend. In the summer of 2015 the company belonged to Gunvor Group, Timchenko was one of the co-founders. But due to the Russian aggression against Ukraine, Putin’s friend fell under US sanctions, which forced him to withdraw from Gunvor’s shareholders. Gunvor, in turn, sold a 74% stake in Ust-Luga Oil to Russian oligarch Andrei Bakarov. The remaining 26% belong to the Cyprus company Capefar Limited, whose owners do not appear in public sources.

The statement of the Deputy Minister of Transport of the Russian Federation Viktor Olersky about the transportation of oil products through Russia has not been commented on by the Belarusian side. Meanwhile, the “Belarusian Oil Company” is holding a tender on October 26 for the sale of petroleum products. The Russian port of Ust-Luga is among the participants. The delivery time is November 2017 – March 2018. Transshipment can be carried out through the terminal “Portenergo” — its capacity is much smaller than “Ust-Luga Oil” and it is used only for transshipment of light oil products and liquefied gas.

The terminal belongs to the company Sibur-Portenergo, with 51% of shares owned by the Mubadala fund from the UAE. The chairman of the board of directors of Mubadala is Sheikh Mohammed bin Zayd al-Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces of the United Arab Emirates, who is on good terms with the family of Alyaksandr Lukashenka, TUT.by notes.

Ihar Illyash / , belsat.eu

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