Belarus seeks new European oil-product shipping routesStaff Writer | October 2, 2017
Russian efforts to have Belarus to ship oil product exports via Russian ports rather than through Latvia and Lithuania are unlikely to be successful for cost reasons.
Energy Cost reasons
Belarus is almost entirely dependent on Russia to supply crude oil to its two refineries, at Mozyr in the south and Novopolotsk in the north, which it buys at favorable rates.
Wider tensions have periodically disrupted supplies however, and Russia sharply reduced crude deliveries to Belarus last year, before a deal was reached to resolve the issue this April.
At a conference in Minsk, the acting director general of state-owned Belarusian Oil Company (Beloil), Sergei Grib, said a 50% discount offered by Russia as an inducement to Belarus to ship oil products from its refineries through Russian ports in the Gulf of Finland was still not competitive with costs through Latvia and Lithuania.
Belarus is giving buyers the option to receive products at the Russian port of Ust-Luga, but "the 50% discount they gave us still doesn't cover the cost of railway shipment. In addition, Russia has very high trans-shipment costs by comparison with the Baltic ports," Grib told S&P Global Platts.
Grib said the distance from Belarus' northern refinery, Naftan, to Ust-Luga, at 800 km (496 miles), is double that to the Latvian port of Riga. ■