Belarusian refineries to reduce oil products supplies to EU, increase supplies to Russian market amid sanctions - expert

<p> MINSK, Sep 20 - PrimePress. Belarusian oil refineries (Mozyr Oil Refinery, Gomel Oblast and Naftan, Novopolotsk, Vitebsk Oblast) will reduce oil products supply to the European Union (EU) and increase exports to the Russian market amid external sanctions. Andrey Dyachenko, chief analyst for macroeconomics, oil and oil products markets at Petroleum Trading, said this in a commentary to RZD-Partner. </p> <p>   </p> <p> As previously reported, on 24 June 2021, the EU Council imposed sanctions against major sectors of the Belarusian economy, which it justified by the escalation of human rights violations in Belarus, as well as the incident with the emergency landing of a Ryanair flight in Minsk. The EU Council Sanctions also approved sanctions to be imposed against exports of Belarusian petrochemical products to the EU. </p> <p>   </p> <p> According to Dyachenko, sanctions risks will lead to a decrease in supplies of Russian oil to Belarus; consequently, the oil and gas industry of Belarus will not be able to “make money on processing Russian oil as before”. In this situation, Belarusian refineries will reduce direct supplies to the EU and increase exports of oil products to the Russian market. </p> <p>   </p> <p> Russian refineries, in turn, will occupy the vacated export niches in the European direction. “Overall, the balance should be maintained. And taking into consideration the fact that export direction is profitable for our refineries (domestic market, even being at times premium, is not able to consume the whole volume of products made by domestic refineries), such a swap - Belarusians sell to our domestic market, Russian refineries sell to overseas markets - may be even profitable for us”, said Dyachenko. </p> <p>   </p> <p> “Now the task is to work out a new regime for the oil and gas industry of Belarus so that it does not die. But it will not be possible to “roll in clover” in such conditions. The logistics of oil deliveries, if we are talking about transit, is unlikely to change in any way. With regard to oil delivered for refinery processing, the supply pattern is already changing - Russian companies do not want to expose themselves to the risk of sanctions, so companies that have no meaningful “communication” with the outside world are built into the logistics. Russian companies have already learned, for better or for worse, how to avoid the risk of sanctions and still continue working,” the expert noted. </p> <p>   </p> <p> As previously reported, Russian companies increased oil supplies to Belarus by 15.5% year on year in January-July 2021 up to 7.09 million tonnes. </p> <p>   </p> <p> The Central Dispatching Department of the Fuel and Energy Complex of the Russian Federation reports, Russian companies increased oil deliveries to Belarus by 34% up to 6.224 million tons in January-June 2021. At the same time, according to the Central Dispatching Department’s data, in June 2021, Russia’s oil exports to Belarus fell by 62.7% year on year to 374,700 tons. </p> <p>   </p> <p> Such dynamics of supplies in June could be attributed to the resumption of sanctions imposed by the U.S. against Naftan (Novopolotsk, Vitebsk Oblast) from June 3, 2021. In this connection, sources in major Russian companies said that they refused to work with Naftan. </p> <p>   </p> <p> According to Russia’s Central Dispatching Department of the Fuel and Energy Complex, Russian companies reduced oil supplies to Belarus by 24.1% year on year in 2020 to 13.35 million tonnes. End </p>

2021-09-21

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