Russia Settles Oil Dispute With Belarus as Global Price War Rages On

A months-long oil supply dispute with Belarus has been settled, according to a report by Reuters, while officially, Russian Prime Minister Mikhail Mishustin spoke with his Belarusian counterpart Syarhey Rumas about oil deliveries.

Three industry sources told the news agency on Monday that the two sides have resolved the three-month price dispute as Moscow seeks as many buyers as possible in a fight for market share after a landmark cooperation agreement with Saudi Arabia fell apart.

Minsk and Moscow have been at odds since the start of the year, when they failed to agree on terms for oil deliveries in 2020. Some Russian oil companies suspended oil shipments to Belarus.

Russia had been supplying crude oil to Belarus with no export fee under a trade deal between the two countries.

However, Russia amended its Tax Code in 2019 and damaged the profitability of Belarusian refineries — some of the country’s most important companies — sparking anger in Minsk.

Russian tycoon Mikhail Gutseriyev, who owns Russneft and Neftisoy, has been supplying the Belarusian refineries in the meantime until a solution to the pricing problem is found.

Russia, along with some other producers, was part of a wider alliance with the Organization of Petroleum Exporting Countries (OPEC). For three years, this group, known as OPEC+, was coordinating their supply to support global oil prices.

That alliance fell apart on March 6 after Russia and Saudi Arabia failed to agree on how to act amid falling oil demand from the global coronavirus outbreak, effectively starting a war for the market share.