Page 5 - FSUOGM Week 05 2020

FSUOGM COMMENTARY FSUOGM
millions of barrels of oil contaminated with organic chlorides. Belarus’ re neries su ered damage from processing the spoiled oil, and they had to shut down production while the Druzhba pipeline was emptied and cleaned.
Running parallel to the energy dispute, Russia is also pushing for closer political and economic integration with Belarus, via the creation of the so-called Union State. By withholding oil sup- plies, Moscow wants to put pressure on Minsk to make greater commitments to the initiative. It risks overplaying its hand, though, as prolonging the dispute even longer could cause lasting harm to ties between the two nations.
Upping the ante
Belarus has taken some oil from Norway to help cover its short-term needs. As in previous dis- putes, it has also talked up prospects for securing alternative oil and gas supplies on a long-term basis.
Belarus has suggested it can obtain oil from Caspian producers Azerbaijan and Kazakhstan, using a currently idle pipeline that runs from the Black Sea to north-west Poland. President Alexander Lukashenko has also suggested that Belarus could turn to the US, Saudi Arabia and the UAE for supplies.
“I have excellent relations with them. ey promise to supply as much oil as we need,” the head of state told reporters on January 24. “Cer- tainly, this is at the global price. But the quality of their oil is better.”
In an apparent show of support, US Secretary of State Mike Pompeo even made a visit to Minsk this week, promising that the US would deliver
as much oil and gas as Belarus wanted.
“We’re the biggest energy producer in the world, and all you have to do is call us,” Pom- peo said. “Your nation should not be forced to be dependent on any one partner for your prosper-
ity or for your security.”
It is unclear to what extent Belarus’ bold
claims are simply meant to reassure a domestic audience, or are really an attempt to put pres- sure on Russia to make concessions. In any case, Belarus currently has no real alternatives to con- tinued dependency on Russian energy. Were Belarus able to diversify its oil and gas imports without signi cantly increasing costs it would have done so already.
Under the gas supply deal covering January and February, Belarus will continue paying the same price for Russian gas as last year, which is $127 per 1,000 cubic metres. In contrast, Gaz- prom charged its customers in Europe an aver- age of $219 during the rst nine months of 2019.
Similarly, Russian oil remains by far the cheapest option for Belarus, in part because both of the country’s re neries are supplied directly via the Druzhba system.
It is di cult is predict how long the dispute between Belarus and Russia will continue. But as was the case with previous quarrels between the two former Soviet states, it is likely to end with both sides claiming victory. In reality, though, Russia will keep using oil and gas supplies to exert signi cant economic and political control over its western neighbour. is will in turn help President Vladimir Putin advance his integra- tion agenda. ™
Map showing Russia’s pipeline system in Belarus and Belarus’ two re neries.
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