Belarus has suspended the export of light oil products to Ukraine and several other of its neighbors, in a move that could affect fuel prices in these countries.
Minsk halted the exports due to the low quality of the oil supplied by Russia, Sergei Grib, deputy general director of the Belarusian Oil Company, said on April 23 at a conference in Minsk, according to the BelTA news agency.
The news came as a surprise to Ukraine, where Belarusian light oil products make up around a third of the fuel market. Minsk has also suspended exports to Poland and the Baltic countries.
“At the moment (our) contractual obligations are at a halt until we resolve the issue with Russian oil,” Grib said.
By the end of the year, Minsk plans to start importing oil from other countries, he added.
According to the A-95 energy consulting group, in 2019 Ukraine has so far imported 160,000 tons of Belarusian diesel fuel per month on average – a 34.5-percent share of the market.
“Under the optimistic scenario, 80,000–100,000 tons will have to be found (for Ukraine). Under the pessimistic one – 150,000–180,000 tons (per month),” said Serhiy Kuyun, director of A-95, according to the company’s official website.
However, Kuyun is not expecting gasoline shortages. Belarusian petrol will be replaced by Ukrainian-made fuel, or fuel imported from Lithuania by sea, he said.
But the suspension of exports could influence fuel prices. In May, prices will increase by Hr 2 ($0.08) per liter on average – Hr 1 due to fluctuations on world markets and Hr 1 due to the Belarusian factor, A-95 forecast.
Dirty Russian oil
On April 19, Belarus’s Belneftekhim state oil and chemical company, one of the country’s largest industrial complexes, stated that the quality of oil coming from Russia was very low. Around 700,000 tons of oil supplied to Belarus contained organochlorine compounds tens of times higher than acceptable levels, the BBC reported.
Poor quality Russian oil even damaged expensive equipment at the Belarusian Mozyr Oil Refinery, costing the company tens of millions of dollars.
In response, the Belarusian government decided to decrease production at its second oil refinery to avoid further breakdowns.
As a result, the production of light oil products declined and Belneftekhim decided to temporarily stop exports.
Russia’s state-owned Transneft oil company stated that pipeline company Gomeltransneft Druzhba – which transports Russian oil to Ukraine, Poland, Germany and other countries, and also supplies Russian and Belarusian oil to the Mozyr refinery – had supplied the poor-quality oil to Belarus.
