Russian and American Oil for Belarus and the EU

What is the price of Russian oil for Belarus and Europe?

This question is especially relevant in the light of the current oil conflict between Minsk and Moscow and the search for alternative sources of oil by Belarus. U.S. Secretary of State Mike Pompeo, who visited Minsk last week, offered Belarus to buy oil from the U.S.

How much do Belarus and the EU countries pay for oil?

There is information presented below on oil imports in the year before last. It indicates final data that can be compared. Although prices have changed, the ratio between countries can be estimated.

Table 1 provides data on the main importers of Russian oil in Europe.

The data shows that the price of Russian crude oil for Belarus in 2018 was significantly lower than for Russia's main trading partners in the European Union.

Belarus' dependence on Russian oil was total. However, some other European countries were also heavily dependent on Russian oil - Finland, Lithuania, Poland. Russia has supplied more than a third of the oil to Germany and the Netherlands.

Belarus' dependence on Russian oil was also reflected in the proportions between the import of Russian crude oil and the size of the economy.

The volume of Russian oil imported in Belarus was as the same as that in Poland and the Netherlands. The GDP of these countries was 10 and 15 times higher.

As a result, Germany, Poland and the Netherlands paid more money than Belarus, but these expenses made a small part of their national wealth. Belarus spent every eighth ruble produced by the economy.

Lithuania had a similar situation - Russian oil made up a considerable part of oil imports (although smaller than in Belarus), while Lithuanian expenditures on Russian crude oil purchase also made up a significant part of national GDP.

In the light of the generous offer voiced by Mike Pompeo, prices and amounts of U.S. oil purchased in 2018 by the EU countries look attractive.

The two tables show that US oil cost more than Russian for each of the European consumers (except the UK). However, oil from America made up a small part of European countries' oil imports.

In 2018 Lithuania did not buy American oil. The share of American oil for Germany was 6 times less than Russian, in Poland - almost 40 times less.

So, Mike Pompeo's offer to buy in all the necessary oil from the USA is generous and flattering. However, the closest allies of the USA, the richer countries, and finally the countries which have their ports, enjoy such American offers in rather modest amounts.

They buy some American oil, but mainly to diversify oil imports to reduce dependence on one Russian supplier.

Pompeo's offer to Belarus was more like a political gesture than a commercial alternative.

Throughout January, while the oil "war" with Russia lasted, the Belarusian authorities discussed alternative supplies. It was even stated that Russian oil should not exceed 30-40% of imports. Table 1 shows whether our neighbours, NATO and EU members succeed in it.

The result will likely be as follows: Lukashenka will agree with Putin (it will happen sooner or later). Russian crude oil will flow to Belarus (higher in price, but not as high as for Europe). Everybody will sigh with relief and forget the reasoning, threats and chest-puffing regarding the alternative oil. Until the next "war".

What a shame. The experience of Europe shows that it is possible and necessary to seek alternatives before the next oil "war" with Russia begins.

Yuri Dracokhrust, tut.by