Russia-Belarus Oil Feud Could Hurt Ukraine: Analysts

Ukraine could face a fuel crisis and be the main affected party in a feud over oil between Russia and Ukraine, analysts interviewed by Moscow-based newspaper Izvestya say.

Belarus is Ukraine’s main supplier of oil products made from Russian raw materials.

“It is very difficult to find alternative suppliers to Moscow and Minsk, since Ukraine faces a shortage of rolling stock for transporting oil products,” said energy expert Dmitry Marunich, adding that he hopes the situation will not escalate critically. According to the expert, oil refining in the country is in decline and the situation is aggravated by Russia’s recent decision to ban exports of oil and oil products to Ukraine.

Alexander Frolov, deputy director of the National Energy Institute, told Izvestya that the Ukrainian fuel market could collapse if supplies from Belarus to Ukraine do not go back to their previous level. The expert is more optimistic about other importers of Belarusian oil products Poland and the Baltic countries.

“For them, reducing and even halting supplies of Belarusian gasoline and diesel fuel is not critical. Russia and other countries can easily replace oil supplies from Belarus,” he told the newspaper.

The analyst noted that the position of Minsk looks like a plausible excuse for maintaining a high margin of the Belarusian oil refining at the expense of cheap oil from Russia.

Minsk’s losses due to Russia’s tax maneuver in the oil industry, the main obstacle in bilateral relations, are estimated at $10 billion – and Belarus seeks to compensate it.

“As a result, Belarus might give up their market share to Russian and European companies,” Frolov said.