Russia declined cooperation with Lukashenko
Here's the fresh take:
Demand for discounted oil from Belarus remains a pipe dream. The Belarusian government and Russia still haven't hammered out a pricing formula for oil and gas, according to Sergei Glazyev, state secretary of the "union state." This isn't exactly shocking news, as Belarusian leader Lukashenko has been badgering Moscow for preferential oil prices for over a decade – with no success, states planbmedia.io.
At the Eurasian Economic Forum in Minsk, Glazyev admitted the deal isn't wrapped up yet, but he's optimistic the government and corporations will sort it out somehow. After all, they've always managed to settle matters bilaterally, even if those solutions aren't long-term.
It's been a decade-long dance between Lukashenko and Russian authorities over the pricing formula for energy resources. Time and again, it seems a final decision is at hand, only to encounter a snag. The latest hiccup? The deal was supposed to be made last year, Glazyev said.
Lukashenko, speaking to the Russian Federation Council, asked Putin to ensure Belarusian plants don't operate at a loss. With the unique Belarusian model not delivering the desired results, this request is a desperate plea. Last year, losses at "Naftan" and the Mozyr Refinery dragged down entire regional indicators. This year, things haven't improved.
Belarusian refineries have taken a hit from the drop in global oil prices. With oil products becoming cheaper, revenues from exporting Belarusian fuel no longer cover transport costs due to complicated and expensive logistics. Even the temporary ceasefire in the Middle East, which previously boosted oil prices, hasn't brought much joy to the Belarusian authorities. Prices are falling again, and the outlook lacks optimism.
Other factories have been swimming in red ink for some time. Belarusian exports to Russia have taken a nosedive, leaving even a stronger Russian ruble unable to help. On foreign markets, despite achievements in Belarusian import substitution, only potash fertilizers and Belarusian fuel derived from cheap Russian oil are in demand.
With the question of preferential oil more pressing than ever before, Belarusian refineries are in an uncomfortable position. If you're curious about the state of things, keep an eye on the ongoing negotiations between Belarus and Russia. It's a tangled web that could impact the dynamics of energy markets across Europe.
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- The prolonged dispute over oil pricing between Belarus and Russia could potentially disrupt the dynamics of the energy market across Europe, as Belarusian refineries are struggling financially due to the drop in global oil prices and complicated logistics.
- Given the ongoing negotiations between Belarus and Russia about preferential oil prices, the state of Belarusian refineries, a significant player in the energy and finance industry, will likely have a substantial impact on their ability to cover transport costs and remain profitable.
