“Lukashenka’s Statement On Russian Oil Replacement Remains Pure Populism, War Of Nerves”

Under the terms set by the dictator, any attempts of replacement could be no more than an expensive experiment.

In theory, Minsk might find substitution for the Russian oil, the supplies of which decreased due to the oil and gas conflict between Russia and Belarus, but this substitution would not be cost efficient.

This was stated by the Russian energy experts to EADaily on January 20.

Head of the Section of the Economic Department of the Institute of Energy and Finance Sergey Agibalov said that in fact no alternative to the Russian oil existed.

"Physically, Belarus can develop oil supplies from some other region. They can, for example, try to buy Azerbaijani oil, as was done previously. But the point is that there is only one commercially viable option here – the duty-free Russian oil supplies. The Belarusian oil refineries cannot buy any other oil at market price, and cannot process it cost-effectively either. We can only talk about tanker procurements. However, both the Russian and the Belarusian side understand that it will be possible to refine it, but not to make money on it. So the origin of this oil remains a secondary issue, "— Agibalov has said.

Thus, as noted by the expert, Aliaksandr Lukashenka’s statements regarding substitution of the Russian oil appear pure populism on the one hand, and an attempt to tick everybody off.

“In fact, Belarus cannot get off the Russian oil. They got stuck in subsidies provided by the Russian side and until they modernize their refineries they will not be able to substitute the Russian oil no matter how desperately they want it. Any attempts of replacing will be nothing more but an expensive experiment. As for the modernization program, it has been delayed from year to year,”— Agibalov has summarized.

Head of the Analytical Administration of the Fund of the National Energy Security Alexander Pasechnik reminded that Minsk tried to substitute the Russian oil before.

“Minsk used to receive oil supplies from Venezuela, from Azerbaijan. However, it all happened in a sort of a test mode. Apparently, these alternatives weren’t full-fledged, either with regard to their commercial aspect or logistics. The negotiating process and the full solving of the energy conflict between Minsk and Moscow seems the best possible way. We, as you know, are ready to supply as much oil as Belarus needs. The point is, Minsk has not paid for gas in the complementary sector. There is an underpayment on the gas contract, so Russia is forced to impose certain restrictions in order to stimulate Belarus to pay the debt which has already reached almost half a million dollars,” — Pasechnik said.

He noted that these restrictions only affected the first quarter of 2017 so far. "It is clear that this is a systemically important industry in Belarus. So Minsk is trying to find alternatives. However, this does not negate the negotiating process, which will be held between Moscow and Minsk in the first quarter, "— the expert added.

Previously, Lukashenka instructed to find a substitute to the supplies of the Russian oil. "There is no catastrophe, but the reduction in oil supplies from Russia should be replaced by alternatives. We haven’t just worked through these alternatives. We have tried a few, we already experienced them in practice, delivering oil from the Black Sea and the Mediterranean to our refineries, in practice, to see how it will look like economically, "— the Belarusian leader said.

Russia significantly reduced the volume of oil supplies in Belarus in connection with another oil and gas conflict, which started due to the fact that Minsk had refused to pay for the Russian gas at the price specified in the contract.