Belarus will start buying Russian oil at $4 per barrel

The Prime Minister of Belarus Sergey Rumas announced announced that Minsk will start purchasing Russian oil at only $4 per barrel.

"Today, I think Belneftekhim will finish negotiations with Russian companies on oil supplies for April. We expect to receive 2 million tons," the BelTA news agency quoted Rumas as saying.

Rumas stressed that the deliveries will be carried out without extra surcharges.

"The hard and consistent attitude of the head of state to buy Russian oil without a premium in price is maintained by the government. The result of this position is the price at which we will buy oil in April from the Russian Federation - about $4 per barrel," the Prime Minister of Belarus said.

The price of Russian oil fell to 1998 levels at the end of last week and the beginning of this week.

The framework agreements between Russia and Belarus on oil supplies in 2020 provide for the shipment of 24 million tons of oil to Belarusian refineries, which would correspond to an average of 2 million tons per month. But by the beginning of the year there were no contracts for these volumes due to disagreements between Russian companies and Belarusian buyers regrding the pricing. Negotiations on terms of supply continued throughout the first quarter.

At the end of December 2019, Russia and Belarus were unable to reach an agreement on the terms for oil transit. Moscow has stopped deliveries as of January 1, and Minsk temporarily suspended its oil products exports, although this was resumed by mid-January. Lukashenko said that if Russia makes its oil too expensive, Belarus will be forced to look for alternative supplies, including the reverse transit of Saudi or US oil through Poland.

In mid-January, Belarusian First Deputy Prime Minister Dmitry Krutoy said that Minsk considers it inexpedient to continue overpaying Russian companies for oil and is looking for suppliers in other countries. It was later learned that Belarus had bought 80,000 tons of oil from Norway, and that Lukashenko had instructed the government to sign a supply contract with Kazakhstan.

In mid-December, Belarusian Finance Ministry Maksim Yermolovich signed an agreement to take an urgent 3.5 billion yuan loan (around $500 million) from the Shanghai branch of the China Development Bank. Previously it was reported that Belarus had requested such a loan from Russia but had failed to reach an agreement.

  Belarus, Russia