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Belarus bought its first batch of 80,000 tons of crude oil from the state-owned oil company Saudi Aramco, Belneftekhim spokesman Alexander Tishchenko said.
A tanker with Arabian crude oil is expected in the port of Klaipeda, Lithuania on May 11th.
The concern also did not rule out that oil purchases from Saudi Arabia could be continued in the future, it would depend on “the pricing environment and the market situation.”
Back in February, Belarusian President Alexander Lukashenko announced that Minsk was in talks with various countries to diversify oil imports into the country, including with the United States, United Arab Emirates, Norway, Azerbaijan, Kazakhstan and others.
In addition, oil deliveries in the Baltic via Gdansk were announced via one of the lines of the Druzhba oil pipeline in reverse mode.
In April, the supply crude oil via tankers to the country amounted to 170,000 tons. The unloading ports are Ukrainian Odessa and Lithuanian Klaipeda.
These volumes, of course, are small, however, experts say that today’s alternative deliveries are a “trial balloon” in anticipation of larger-scale diversification steps.
Lukashenko, reportedly, plans to reduce the share of Russian crude oil exports to only 30-40%, and the remaining crude would be supplied through Ukraine and Lithuania.
Belneftekhim announced that in May Belarusian oil refineries will reduce oil imports from Russia to 1.13 million tons (compared to 1.56 million tons in April).
“In April, Belarus, as planned, received about 2 million tons of oil, 1.56 million tons of which are Russian deliveries via pipe and rail. The remaining volume is tanker deliveries and own production. In May, plans for deliveries from Russia were confirmed at 1.13 million tons,” Tishchenko said.
Between January-March, Russia didn’t deliver any oil to Belarus, since the two countries couldn’t agree on terms of delivery and prices. Regular deliveries continued in April.
The Minister of Energy of the Russian Federation, Alexander Novak, earlier stressed that Russian companies are ready in May to deliver oil to Belarus in the originally provided volume – that is, 2 million tons. That is evidently not going to happen.
All of this means that Saudi Arabia is continuing its oil price war, by flooding the European and Asian markets with heavily discounted crude oil, thus making it unfeasible to purchase oil from Russia, and other sellers.
Meanwhile, Russian oil and gas exports face difficulties with Ukraine, as the situation between Gazprom and Naftogaz continues being complicated.
Ukrainian company Naftogaz received a net profit of $ 2.3 billion for 2019. Compared to 2018, profit grew by $ 1.9 billion, or 5.5 times.
Net cash generated from operating activities amounted to 110 billion hryvnia (about $ 4 billion). This amount includes 55.7 billion hryvnias (about $ 2 billion) of compensation following a positive decision in arbitration under a transit contract, net of income tax. Before tax, the amount of compensation received amounted to $2.9 billion, the company said. Essentially, all of the company’s profit came from Gazprom paying it the settlement.
Ukraine also suggested that Russia should store gas in Ukraine.
The Director General of the Ukrainian gas transmission system operator (which has been carrying out the transit of Russian gas to Europe since January 1st, 2020) Sergey Makogon suggested that Gazprom lease part of the capacities of Ukrainian underground gas storage facilities (UGS) for injecting surplus gas.
“I think this year 10 billion cubic meters will be available for injection. m of gas from 31 billion cubic meters. m of total capacity [Ukrainian underground gas storages]. Gazprom can also store gas in Ukrainian underground gas storage facilities,” he said in an interview with RBC.
According to a new contract concluded at the end of 2019, the Russian company is to deliver 65 billion cubic meters of gas to Europe through Ukraine in 2020, or 178 million cubic meters per day.
The parties agreed that even if transit would be less, Gazprom should still pay for these minimum capacities for pumping gas.
“Already, the company does not fully use the paid transit capacities – out of 178 million cubic meters per day, only an average of 150 million cubic meters is used. That is 28 million cubic meters. m per day is paid, but not used,” Makogon said.
Therefore, it makes sense to consider the appropriateness of using all the paid capacity for importing gas to Ukraine, part of the volume can be given for transit, and the remainder can be brought into storage, he added.
According to the head of the Ukrainian gas transportation system operator, in winter, when demand in the EU grows, Gazprom will be able to pick up gas from underground storage facilities and send it to the EU.
For this, the company needs to sign a standard storage agreement at the rates of the Ukrainian regulator – about $ 10 per storage cycle of 1 thousand cubic meters. m of gas. The gas storage cycle in the UGSF includes the cost of three processes – injection, storage and, usually gas is pumped into storage from April to October, and taken in winter.
The situation is such that Gazprom needs to pay for larger amounts than it actually transits, and this, in no small part is a result of the epic drop in demand for not only crude oil, but all other types of energy.
“Ukrainian UGS facilities are 3-5 times cheaper than European ones, therefore there is demand and economic feasibility,” Makogon emphasized, adding that Ukraine is open for negotiations.
At the same time, Ukraine continues its course of proving it is not a loyal business partner, as Gazprom has paid the settlement in full and carries out its obligations, while Ukraine offers no quarter and would ask for even more funds in the case it stores Russian natural gas.
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Well, Belarus should thank Russia for that too as the the dumbass moron MBS took on Russia in a suicidal price war and ruined his shithole sand trap. Everyone is stocking up on Saudi free oil and there is nothing wrong with that, eventually they will all be kissing Russian and Iranian arse as both have the largest oil and gas reserves. China and India are also doing the same. The Chinese have built mega storage facilities in the past month alone and have increased their tanker fleet by more than double. Belarus reserves are peanuts in contrast.
So.. Russia is paying billions to Ukraine because some “international court” decided so and Ukraine uses this money to kill russians in Donbass.. Fnack off Kremlin, Putin & co..
Very strange version.
Is Russia paying money to Ukraine? Yes. ” This amount includes 55.7 billion hryvnias (about $ 2 billion)..a positive decision in arbitration under a transit contract..”
Are Russian civilians killed in the Donbas? Yes. Attacks are daily in the so-called “frozen conflict”.
Who is still applying the same strategy of trying to lure back Ukraine? The Kremlin..
Nothing strange once one is willing to face reality and abandon his idols.
They should stop giving money to the ukrainian oligarchs, going along with extortion isnt a good idea. That “international” court it’s run by the U.S gestapo, it doesn’t make it real nor valid.
Actually Oligarcs should be reformed away and randomized oppinions like Yours too.
Putting in US and Gestapo in the USSR collapse does it.
two refineries, one in the north, naftan close to the russian border and one in the south, mosur on the ukrainian border. the first is primarily exporting its stuff through Riga and Klaipeda and the other one domestic and ukraine and poland. guess the saudi oil will be by train from klaipeda in tank wagons of 50 tonnes each or 20 per thousand tonnes. lots of work but the discount must be awesome and it tells me that mohammed bin salman is mightily pissed off with Putin when infringing on russia’s next door neighbour(s). today Urals is at 19 bucks per barrel and saudi is at 14 bucks per barrel plus hefty transport costs, transfer of the stuff from one 2 million barrel tanker to smaller sizes that will fit into the baltic. hey saudi math at its best.
Thats how many has predicted. The only winners are the poor buyers. Thats fine with me. We were in a small declining and Corona was added and then we get some temporary compensation.
The looser is the climate and health because fx Windpower now is more expensive then oil to fx 20 dollar a barrel.
I deel nothing fofr the loosers like Russia, where the pain price was about 40 dollar pr barrel. An should some american high poluting thracking producers of gas go back to reserve, its exact same thing.
Hip hip for those who started in.
US oil suppliers need over $50 oil price to become profitable, so we will see that supply destroyed first. US oil suppliers have also produced negative profits and cash flow for most of their life.
Saudi production costs are cheap at $10, but remember their budget relies almost totally on oil, which needs something more like $85. So Saudi Arabia is burning their foreign exchange reserves quite fast, and as a nation state I believe could collapse within a few years, and lose the war in Yemen.
https://www.bloomberg.com/news/articles/2020-04-28/saudi-central-bank-fx-reserves-plunge-27-billion-in-march
I bet the transport and storage costs are highest component of the contract.
How dare they ? Russian ‘democracy’ will visit Belarus very soon . LOL.