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Moscow To Cut Oil Supplies To Belarus In Payment Dispute

Moscow most likely will reduce oil deliveries to Belarus in the first quarter of 2017 over a payment dispute with the former Soviet republic. Minsk owes the Kremlin $400 million for hydrocarbon deliveries in 2016. Belarus has sought additional payment concessions in addition to the subsidies Moscow has offered, including a loan.

Belarusian Deputy Prime Minister Vladimir Semashko said that he expected to strike a deal during the first quarter of 2017. He said major agreements were reached back in October, but then “something went down” and “a road map was not approved for implementation due to some reasons.”

Vyacheslav Mischenko, Senior Vice-President of Argus Media, said this is not the first conflict over energy resources between the two countries, but all of them ended upon one scenario: both sides made concessions. The expert was confident that a political decision would be taken soon. He noted that oil supply cuts are disadvantageous for Belarus as this could result in a loss in revenues due to the down time at the plants and lower levels of processing. This is efficient leverage for Russia to make Belarus pay off the debt with a certain discount or another scheme, for example obtaining assets, like in the case with Beltransgaz, Mischenko explained, reports Russian State News Agency TASS.

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