Love oil. Where to bring relations between Moscow and Minsk the oil dispute and the transit authority (Carnegie Moscow Center, Russia)

In December, it was expected that Minsk and Moscow are to sign an ambitious integration plan. Russian optimists-the Imperials and the alarmists in the rest of the world predicted that Russia will absorb Belarus in order to solve the problem of 2024, or simply to raise the rating. Skeptics expected that the parties will sign declarations and traditionally swing them in the process.

But everything went according to third — Minsk and Moscow have not agreed even on the symbolic agreements. Instead, they have already beaten track entered the new year oil and gas conflict that can put an end to all the integration dialogue.

failed cards

a Dialogue about deepening of integration is counted from the “ultimatum Medvedev” — December 2018 the now former Russian Prime Minister said that if Minsk wants to keep oil and gas preferences, you need to perform a Union agreement two decades ago.

Over the next year, the two governments were able to almost completely agree on a plan of at least partial convergence — harmonization of the laws of the two countries. But by December 2019 in the rhetoric of the parties has been dominated by two key differences that have stalled the process.

the First problem is the inability to agree on the order of moves. This is a consequence of the crisis of confidence between Moscow and Minsk — side too long know each other, to believe in the word.

Therefore, Minsk insisted on its conditions before the start of the harmonization of the legal system or parallel to it. It was about the fact that Russia was compensated by Belarusian oil refineries a tax maneuver in the oil sector, also sell Belarus gas at Russian domestic prices. Moscow was ready to discuss these cakes only after the implementation of the road maps.

the Second, more serious problem exposed inlast time. First Putin, then Medvedev said that integration would be incomplete without supranational bodies and the single currency. According to Medvedev, these issues are described in the 31st road map that Minsk does not want to sign.

From the very beginning it was clear that deep integration of countries cannot work without common institutions. But all year side, as if in collusion, pretending that we can reinvent the wheel in new ways to integrate deeper than today, but only at the level of laws, not creating the institutional superstructure.

When it became clear that Lukashenka is not going to sign a road map with no oil and gas concessions in Moscow obviously decided to end diplomacy and announce that they want to see full political Union.

After that compromise became impossible. Supranational bodies and the single currency is theoretically acceptable for Minsk, but only if those bodies and the question of the issue of currency Belarus has an equal voice with Russia. It is impossible to imagine the Russian government, which will agree to that.

Without such guarantees, even to talk on these topics for Lukashenka is dangerous — that trade sovereignty. Therefore, in his interview to “echo of Moscow”, he responded sharply to the President and Prime Minister of Russia that the parties had agreed not to discuss the single currency and controls. But Medvedev, who revealed the content of toxic 31 of the road map, they say, do not know — it was not at the last negotiations, angrily said Lukashenko.

Oil of contention

the new year Minsk and Moscow came without contracts for oil and agreed prices for gas. Putin and Lukashenko phoned twice on 30 and 31 December. The gas issue they are temporarily settled Belarusian Ambassador Vladimir Semashko and the head of “Gazprom” Alexey Miller have agreed to maintain last year’s price for another two months.

But Russian oil January 1, stopped at Belarusian oil refineries. The root of the differences in price. Russian oil for Belarus becomes more expensive due to the tax maneuver, and in 2023 should be worth 83% of the world price.

to make the delivery attractive for Russian companies, in the last eight years they were paid a small premium — $10 per ton of oil and doesn’t want to do this anymore, referring to the tax maneuver and the deterioration of oil quality. But this small change, which cost Belarus about $200 million a year, has become a cause for dispute.

the Reason — assured of Minsk that his year led by the nose in the oil issue. The Belarusian point of view of Moscow first brought the oil market in the framework of the Eurasian economic Union, promising to deliver raw materials without duties on Belarusian oil refineries. And then not only start to nullify these benefits your tax maneuver, but also exposed the political conditions for its compensation.

Then, last year when the pipe got dirty oil, Belarus, the most affected from the incident, the latter does not pay compensation and only recently agreed on a mechanism for calculating damages. When Minsk was offered to compensate for the losses through the increase of the tariff for transit of oil by 17%, “Transneft” has refused.

on top of Minsk loses nearly half a billion dollars on the cancellation of the scheme perenoski. It 2017 Minsk agreed on the price of gas, which was considered too high, and Moscow in return agreed to supply to Belarus 6 million tons of duty-free oil, which could just resell at the world price. This scheme expired together with the gas contract on December 31 last year.

Refusing to buy oil in the Russian context, Lukashenko went to the principle, did not want to endure the humiliation. Oil without a premium agreed to supply only the company of Mikhail Gutseriev, the friend of Lukashenko. The delivery volume is several times smaller than that of Belarusian oil refineries planned to process for January. In fact, they now work in minimal-load mode to provide the country with gasoline.

the ContextRussian President Vladimir Putin and President of Belarus Alexander Lukashenkobn: weaken Putin pressure on Lukashenko?Belarusian новости16.01.2020 Info: why Putin and Lukashenko played on the nerves of each other?Info.cz12.01.2020 Rzeczpospolita: to get the support of the EU, Lukashenko has уступитьRzeczpospolita10.01.2020

Inconvenient interchange

the First scenario of the further development of the conflict — the Minsk accepts the terms of Moscow and agrees to continue to pay $10 premium to oil companies. Is a loss of face that Lukashenko is not ready to go. Too much threatening rhetoric about an alternative oil sounded from Minsk in recent weeks to now just to take back.

the Second scenario is inferior to Moscow. Either the Russian government will come up with some new compensation scheme type perenoski, or the oil companies will reduce their bargaining requests on the request of the Kremlin.But it is not visible what is not the desire of Moscow to give at least something, but even serious attention to this subject against the background of changes in the government and rewrite the Constitution. On the oil dispute, Russian officials get off with platitudes, obviously taking a wait and see attitude. Former Vice-premiersR Dmitry Kozak said that the oil companies operate under the laws of the market, so with them to Minsk and the need to negotiate.

So, everything is going in the third scenario, which announced Lukashenko at an emergency meeting with the Belarusian oilmen December 31: if Russia does not want to concede, we will look for another oil.

on 20 January came the first news from this front. Minsk bought a trial batch of the Norwegian oil — 80 thousand tons will come through the Lithuanian port of Klaipeda. Then, the Belarusian oil without disclosing the details said that soon will come a new batch of raw materials from other suppliers.

Experts say that Russian oil, though expensive, but until 2024 remains cheaper than raw materials on world markets. Plus the tube is the cheapest method of delivery. According to estimates by Reuters, Minsk overcharged $20 only for the transportation of each ton Norwegian oil.

in addition, the transit potential of the Baltic States is not unlimited. Even if Lithuania and Latvia will begin to carry oil trains, they will not be able to close the annual needs of Belarusian oil refineries. This year Belarus is going to import 24 million tons of oil, and the bandwidth of the Lithuanian port of Klaipeda to 3 million tons per year.

to Use other pipelines difficult. Put the oil on “to Friendship” the reverse of Gdansk refuses Polish operator PERN — he has obligations to current buyers of Russian oil.

There is a black sea supply route to Odessa — Brody pipeline, but the launch of today’s idle state — slow and expensive process, is possible only for large deliveries and long-term contracts.

Therefore, 21 Jan Lukashenko admitted that without Russian oil do not work. And gave a new setku to reduce its share in Belarusian imports to 30-40%, even if I have to buy oil in other places is more expensive.

a Partial failure of the Russian oil is not about the economy. Minsk is a political gesture, which wants to deprive Moscow of one of its greatest assets in a relationship. It is unclear how long Lukashenko can afford it, especially in a presidential election year.

the Compromise upshot of today’s oil dispute has is to decrease the amount of the award requested by Russian oil companies from $10 to, say, $5. But in this scenario tax maneuver remains without compensation, Minsk dissatisfied and continues to look for alternative oil and gas ahead of complex negotiations.

Steamy incentives

In this situation, the dialogue on integration hangs on both sides. In Russia, Putin made a bid for the transit of power through amending the Constitution. That is, the idea of staying in power after 2024, creating a Union state with Belarus, if ever seriously considered, now clearly lost relevance.

This does not mean that Moscow did lose interest in integration. Just now will remain influential interest groups that would lobby for out-of-date script to solve the problem-2024. And therefore, media noise and General enthusiasm around the topic of integration will be less.

in addition, included the human factor. When the Russian system of government is busy with its own restart and concentrated on domestic policy, she will not pay much attention to things like vague roadmaps with Minsk.

And for the Belarusian authorities only incentive to play deep integration has been and remains associated with specific oil and gas benefits from the relationship. If this part of the friendship pergodic to a market economy, then why should Lukashenko do to deepen some kind of integration?

Belarusian President wants to show that a whip against him is not working. Moscow — the gingerbread ran out, rather that their political price rose. The dialogue on integration in stalemate and likely to remain there until something fundamental will not change the interests of the parties.

This can happen if the conflict with Russia, the Belarusian economy will be in bad enough shape that it will jeopardize the political stability in the country. In this case, Lukashenko will begin to change behaviour, but not necessarily in the direction of greater willingness to integrate. Probable option of a besieged fortress, when the internal mobilization of the regime will be marked by external threats from the East: tighten the belt and tighten the nuts to save the sovereignty.

the Course of Moscow in the Belarusian direction will begin to change, if in her eyes the distance of the two countries will look so risky that be decided to change the temper justice with mercy. Or even more anger.

the new York times contain estimates of the solely foreign media and do not reflect the views of the editorial Board of the new York times.