Russia Said to Be Ready to Deliver Oil to Belarus on 2019 Terms

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(Bloomberg) -- Russia is ready to deliver crude oil to Belarus on terms that were in place in 2019, a person familiar with Russia’s position said.

Under last year’s conditions, the cost for Belarus would be $1.6 billion less in 2020 than it would be to buy from elsewhere at market prices with transportation costs included, based on 24 million tons of annual volume, the person said on condition of anonymity. Russia halted crude supply to its neighbor on Jan. 1 after a contract expired, and the two countries are in negotiations on a new one.

Belarus said earlier Saturday it’s close to securing an initial shipment from a Russian company, without paying a premium. Over the past few years, Belarus bought oil on terms similar to that for Russian independent refineries, which involved a small premium, the person said.

Russian pipeline operator Transneft PJSC is processing a request to supply 133,000 tons of crude to Belarus’s Naftan refinery, the company’s press service said. Russneft PJSC and Neftisa, controlled by Russian billionaire Mikhail Gutseriev, applied to supply oil to the same refinery, Interfax reported, citing unidentified people.

Belarus, which has traditionally relied on Russia for crude, says it stands to lose from Russian tax changes. Of the 24 million tons that it got from Russia under a previous contract, 18 million tons went to the nation’s refineries. The rest was allocated for re-export but Russia decided to top providing oil on those terms.

©2020 Bloomberg L.P.

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