Leanid Zaika: Oil Supplies Reduction To Hurt Lukashenka

The country's economy will lose $ 2.5 billion because of the reduction in oil supplies from Russia.

Despite all efforts, the official Minsk has not yet managed to persuade Moscow to supply 23 million tons of oil to Belarus instead of 18 tons. On the eve of the next round of the Belarusian-Russian oil and gas negotiations Lukashenka demanded to find a replacement for Russian oil.

“There’s no catastrophe here, but the reduction in oil supplies from Russia should be compensated by alternative variants,” – Lukashenks said at a meeting with Deputy Prime Minister Uladzimir Siamashka. How the reduction in Russian oil supplies will affect Belarus and what can replace it, read in belaruspartisan.org material.

It will hurt

The economist Leanid Zaika, the head of the Analytical Center “Strategy”, also thinks that the consequences of the reduction in oil supplies will be severe, but not catastrophic.

“In previous years, Belarusian economy was earning approximately $500 from each million ton of Russian oil. Thus, the reduction of oil supplies by 5 million tons means the reduction of income by approximately $ 2.5 billion. It’s not a disaster, but it will hurt a lot, of course," - Zaika says.

At the same time, the negotiations have not yet been completed and it is possible the parties would still be able to reach some sort of compromise, experts say.

Alternatives have no sense

According to Aliaksandr Lukashenka, the alternatives for Russian oil replacement were studied as early as at the end of last year.

“Not only have we studied the alternatives. We have even tried some of them; we have tried to deliver oil from the Black Sea and the Mediterranean Sea to our oil refineries, to see how it will look like from economical point of view,” – Lukashenka stated.

Indeed, in October last year, 84.7 thousand tons of Azerbaijani oil were transported from the port of Supsa to the port of Odessa, and then it was shipped through Ukraine to the Mozyr Oil Refinery in rail tank cars. However, according to experts, this option does not make economic sense. According to experts, Lukashenka's statements about exploring of alternatives are part of bargaining.

“Lukashenka makes such statements, to show Putin that we have other options apart from Russian oil. After all, even Semashko himself admitted, that Belarus was once buying oil from Venezuela to agree with Russia on more favorable terms of purchasing oil. The same is happening now. But Russia is also well aware of what’s going on, that’s why it’s not likely that this argument will help,” – Leanid Zaika believes.

Addict should be urgently blocked from the drug

At the same time, reduction in Russian oil supplies is good for Belarus, Leanid Zaika is sure.

“Today, it’s very dangerous for the economy to rely on oil refineries as on the source of income. 7 million tons are quite enough for domestic consumption. We don’t need the remaining. Export of oil products in our country, which doesn’t produce oil, has already reached 40% of all our export. We have climbed on this oil pipe and have become hydrocarbon addicts. We have almost stopped working. We stopped manufacturing of cars, fridges, TV-sets. A little more and we will forget how to make stools, and will become absolute oil addicts. And this is very bad not only because it will be easy to manipulate us, threatening to cut oil supplies, but also because the oil era is coming to an end. It has already ended. That is why the addict should be urgently blocked from the drug until it’s too late, no matter how difficult it would be for him,” – the economist believes.