Is the Belarus/Russia dispute over?

A deal reached?

Senior officials from Russia and Belarus have announced that the two countries have come to an agreement on oil supply and oil transit terms till September 2010. This (for now) sees the conclusion to a month long row that, like the Ukrainian dispute before it, seriously threatened Russian oil exports to Europe

Speaking to reporters, Russian deputy prime minister Igor Sechin and Belarusian first deputy prime minster Vladimir Semashko announced that they had signed new agreements covering terms for the supply of Russian oil to Belarusian refineries, ending a dispute that generated concern for Germany and Poland over a potential disruption of Russian oil exports.

Closed deal

Although the ins-and-outs of the deal have yet to be fully disclosed, the outline sees a limited volume of duty-free Russian oil deliveries to Belarusian refineries as well as an increase in the transit tariff for Russian oil sent to European markets via Belarus. This compromise has ensured the restoration of oil deliveries to the Belarusian refineries and guarantee the continued uninterrupted transit of Russian oil via Belarus...for now.

This writer is by no means cynical but the fact that the deal is only set for another eight months indicates that both countries will be looking to change the terms in the near future. There are even rumblings that Semashko expects the newly agreed terms to be "short-lived", so it is possible a new oil row could start up again before next winter.

However, the joint declaration that was signed by the two officials on behalf of their countries simply read, "The Russian and the Belarusian sides guarantee stable conditions of oil transit across the territory of the Russian Federation and Belarus."

Belarusian state news agency BelTA quoted Semashko as saying that Belarus will receive 6.3 million tonnes of crude oil duty-free for the country's own use this year, although he added that this volume could be adjusted after September, depending on whether the Belarusian economy grows faster than expected.

While this deals looks remarkably similar to a proposal put forth by Sechin back in early December, this agreement comes with a new sweetener under which Russia consented to an 11 percent increase in the transit tariff for oil exports sent via Belarus to Europe.

Whether relations and trade between the two countries can remain cordial is unfortunately simply a case of waiting and seeing...

Relevant articles:

Russia cuts off Belarus | Russia restarts supplies to Belarus | Buyers, agreements and deals

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