Russia and Belarus agree oil supply terms for 2021

MOSCOW: Moscow and Minsk have agreed on the terms of Russian oil deliveries for 2021, four industry sources told Reuters on Friday, averting potential risks of supply disruption, as had been the case in previous years.

The absence of a deal for 2021 had raised fears over Russian oil supplies to Europe over the holiday period, as Belarus is a key transit route for Moscow's exports to western markets.

The two ex-Soviet neighbours have had a patchy relationship over the years and have quarrelled about a number of issues, including oil and gas sales.

However, Russian president Vladimir Putin has supported Belarussian leader Alexander Lukashenko amid ongoing street protests challenging his win in the presidential elections in August. On Thursday, both countries reached agreement on the gas price for 2021.

An industry source said oil supplies have also been agreed.

"The terms have remained the same," he said of the conditions of Russian oil sales to Belarus next year.

Russia, which normally supplies Belarus with an average of 24 million tonnes of oil per year, or 480,000 barrels per day (bpd), suspended oil shipments to Belarus from Jan. 1 2020 for a few months, after failing to agree a new price with Minsk.

Belarus had imported discounted oil from Moscow for years, reselling some of it and oil products processed from the Russian barrels on to Europe until Moscow decided to stop the practice.

Traders have said that Russian oil suppliers, including Rosneft and Belneftekhim, the Belarus state oil company, held several rounds of talks in the autumn about the terms of supplies.

Major Russian oil producers, Energy Ministry, oil pipeline monopoly Transneft and Belneftekhim, have not responded to requests for comment.

Belarus and Russia are still in talks about compensation for contaminated oil found in the Russian pipeline system last year.