The cessation of oil supplies from Russia jeopardizes the entire economic model of Belarus.
Prime Minister Roman Golovchenko has publicly stated that the U.S. sanctions do not stop the supply of oil from Russia. He stresses that the oil is supplied "in a standard mode," writes nn.by.
Meanwhile, niche Russian Telegram channels report that the Russian Ministry of Energy approved the volume of May supply of oil to the Belarusian Naftan in the amount of only 50 thousand tons. It is 14.5 times less than in April. The reason is the refusal of the major Russian companies to supply oil to the enterprise added to the USA sanctions list.
The volume of supplies to Mozyr has slightly reduced (from 600 to 560 thousand tons), as Mozyr oil refinery is not on the sanctions list.
The sources of Nasha Niva believe this information is true, but it has not been widely announced.
According to the sources, the termination of oil supplies from Russia jeopardizes the entire economic model of Belarus.
Navapolatsk Naftan is capable of refining up to 12 million tons of oil per year. It used to receive 600-800 thousand tons per month from Russia, and the May supply of 50 thousand tons may not even be enough to maintain the production cycle. If the period of shortage extends, there will be desperate times for the oil industry and the entire economy.
"To make the plant operate, it looks logical to send Belarusian oil to Naftan, which we sell to Germany and earn hundreds of millions on it. The problem is that Russia does not supply us with oil products over a certain quota after the story with the dissolvents. We have to solve the problem of satisfying our market with oil products," the sources explain.
The volume of Belarus' production is quite modest, 130-140 thousand tons per month. All of Homel oil goes to refineries in Germany, as it is more profitable than refining it here.
Dark and light oil fractions form various petroleum products. Belarus exports light diesel and gasoline to the West, while the dark fractions produce bitumen, which is supplied to Ukraine.
The actual shutdown of one of the two existing plants will not allow Belarus to enter the premium Ukrainian market in the summer. Until recently, Ukraine was preparing for war by freezing infrastructure projects, but now they are unfrozen. The high season for road and real estate construction is coming, and the demand for bitumen is enormous.
Given that oil product supplies from Russia to Ukraine are banned, the Belarusian companies, usually state-owned, have had all the icing. According to experts, Belarus used to sell bitumen to Ukraine for 460 dollars per ton, while it cost $220 per ton in Russia. Last year, Belarus sold Ukraine 583 thousand tons of bitumen; 410 thousand tons of them were delivered from Mozyr Oil Refinery, which is unlikely to fully concentrate on bitumen under the new conditions.
What will happen to the light fractions is not clear. Therefore, it is logical to reduce deliveries. All in all, Belarus earned $2.7 billion on supplies of oil products in 2020.
But these are short-term risks and missed opportunities, while the absence of supplies to Navapolatsk in the long term seems to be an economic catastrophe. The plant's existence as such may lose its meaning, and the Russians will then be able to insist on the sale of this asset to them - temporarily illiquid.
Why have the Russians become wary of supplying oil?
Rosneft has large joint projects with Western capital: the company is engaged in geological exploration in the USA and is active in South America. Although the company itself is under American sanctions, they are not catastrophic and only reduce the term of Rosneft's lending to American capital.
Russian oil companies keep a close eye on the draconian SDN list; a blacklist adds up for cooperation with companies already on it, like Naftan. It is an innovation. It has not been practised yet, so Naftan felt comfortable even under sanctions.
The fact that Rosneft had to leave Venezuela as soon as the company faced restrictions for violating the sanctions regime proves that the U.S. sanctions are taken seriously.