26 February 2020, Wednesday, 4:10
The Wait Is Nearly Over

Lukashenka Only Got Big Fat Nothing

Lukashenka Only Got Big Fat Nothing

Putin frantically trolled Lukashenka in front of television cameras.

From the very beginning of the year, Moscow and Minsk have been in a state of “oil and gas war”: only Mikhail Gutseriev’s companies supplied oil to the Belarusian refineries, and the gas contract was concluded temporarily, for two months. And the point here is not at all the unwillingness of the Russians, but the fact that Aliaksandr Lukashenka demanded special conditions: gas at the price of the Smolensk region, and oil at a 30% discount.

However, after the final failure of negotiations on the accelerated integration of the two countries, and the beginning of the restructuring of the power system in the Russian Federation, Moscow lost its former generosity. The Belarusian leadership was set the condition: the actual implementation of the agreement on the “union state” (goodbye to Belarusian independence), and then the oil and gas subsidy will continue.

The Kremlin understands that they already have enough levers of influence on the Republic of Belarus, and time plays for them. But Mr. Lukashenka has no time: he will be re-elected on August 30, and if the people under his rule have empty refrigerators by the day of the “election”, even Belarusian trademark vote counting methods may not help the dictator maintain his status.

A week earlier, Aliaksandr Lukashenka met with US Secretary of State Mike Pompeo, and the latter promised him the supply of American oil “on favorable terms.” However, no figures were voiced. In addition, Belarusian refineries still need to be reconfigured to American “light” oil, and it is absurd to bring it from the USA across half the globe. However, Lukashenka seemed to seriously hope that agreements with the Americans would become a trump card in the negotiations with the Kremlin.

The events at the Belarusian-Russian meeting on February 7 developed completely and fully according to the Russian scenario. First, a joint breakfast of the two rulers, about which Vladimir Putin fiercely trolled Aliaksandr Lukashenka in front of the cameras:

- Have you eaten porridge in the morning? - asked Vladimir Putin.

- Not on the water, - the Belarusian ruler reacted.

- Why? it’s very tasty. Try, you will like it.

- Now I’ll try, - Lukashenka smiled.

In the same spirit, everything happened further. After a couple of hours of a tête-à-tête conversation, the rulers set off to play hockey. Along the way, there appeared a “piano in the bushes” right there, Dmitry Medvedev appeared on the stands - “I was walking by, decided to come round.” And this, too, was an element of psychological pressure: it was precisely Medvedev in December 2018 in Brest who announced the new conditions for the relations between the Russian Federation and the Republic of Belarus, which journalists immediately called the “ultimatum”. Namely: any economic subsidies, cheap hydrocarbons - only in exchange for the actual implementation of the provisions of the agreement on the Union State of 1999.

Then, finally, the Russian delegation arrived late because of bad weather. The negotiations began in an expanded format, which led to almost nothing. As a result, the Belarusian side simply refrained from making any statements following the results of the negotiations, Lukashenka, one can already say according to tradition, refused to communicate with the press.

In short: Belarus will receive gas on the same terms; no agreement was reached on oil. After negotiations with reporters on behalf of the Russian Federation, Dmitry Kozak, deputy head of the Putin administration, spoke: “We agreed to maintain the terms of gas supply on the terms of 2019 ... for the whole of 2020”. And this is $ 127 per thousand cubic meters, although Lukashenka demanded $ 70, and pro-government Belarusian media hinted at the possibility of nationalization of Gazprom Transgaz Belarus (owns a system of gas pipelines through which gas is transported from Russia to Europe). Lukashenka sold it to Gazprom in 2011, the crisis year for the Belarusian economy, for $ 5 billion to fix holes in the budget.

Now the issue of gas is closed or, more precisely, “suspended” until 2021. But it should be noted that against the background of a very strong (almost double) drop in prices for “blue fuel” in Europe, it turns out that Gazprom is selling it to Belarusians with sufficient profit for itself.

As for oil, things are much worse for Minsk. “With regard to the supply of oil, we, the government of the Russian Federation, will together assist in reaching agreements between Belarusian consumers and producers of oil in our country,” said Dmitry Kozak. “If we provide discounts, we would need to introduce state regulation of the oil market. What we can not do. We cannot constantly change the rules of the game. We will put our companies in an incomprehensible position.”

That is, the position of Russia has not changed at all: let the Belarusian refineries (or the government) negotiate directly with the Russian oil companies, because this is market. And the “tax maneuver” in the oil industry (due to which Belarus is losing the previous discount in the form of a lack of duties) is a purely Russian internal affair. If you want Russian prices, you should become a part of the Russian Federation, we will only be glad.

After the negotiations, Lukashenka disappeared and still has not reappeared in public. The Belarusian delegation, too. The Belarusian state-owned media are buttoned up and silent. The only comment was given by First Deputy Prime Minister Dzmitry Kruty. According to him, the Russian side agreed that Belarusian refineries would buy oil by agreement with the Russian oil companies at the prices that are set on the world market.

“Belarus does not need any special exclusive conditions, we want to buy oil at world prices, and no worse. Russian President Vladimir Putin agreed with this approach. Moreover, he promised that the Russian government would provide all possible assistance in our work with the Russian mining companies. So that the conditions for oil supplies to Belarusian refineries are precisely the ones mentioned above,” said Kruty.

It would be better if he said nothing at all. Because before the meeting in Sochi, experts insisted that the real price at which the Russian Federation could supply oil to Belarus was around 85% of the world. Since the “tax maneuver” in the oil industry is still far from complete, and deliveries to Belarusian refineries are carried out without export duties. But now, it turns out, they agreed not on 85%, but on 100%?

In fact, the official Minsk made a complete failure. Neither “tankers with Norwegian oil” worked, nor agreements on oil supplies from Kazakhstan, nor the “Pompeo factor”, nor the expressed threats to block the Druzhba pipeline and nationalize the gas pipe.

The results of the negotiations in Sochi can be considered a compromise. To some extent, Russia will retain economic support (through cheap gas). But oil profits must be sent to the oblivion. And this loss is too significant to continue to live in the old way. According to unofficial information, a printing press has already been turned on in Belarus to raise pensions and salaries ahead of the “election” of the president.

But then Belarus will still have to rebuild the economy for life without the risks of “love” with Russia. There will be gas and oil, but much more expensive.

Mikhail Petrovsky, Rosbalt