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Belarus buys Iran crude oil to replace Russian barrels

Belarus’s Bel Oil has bought 80,000 tonnes of Iranian Light and Heavy crude oil from National Iranian Oil Company (NIOC) for loading in February, four sources told Reuters.

It is the first time Belarus has bought Iranian crude oil. The country is looking for alternative crude oil supplies after Russia cut exports to Belarus in the second half of 2016 and is threatening further cuts this year over a row about gas pricing between Minsk and Moscow.

Bel Oil declined to comment on the matter. NIOC did not respond to query from Reuters.

NIOC allocated 600,000 barrels (equals 80,000 tonnes) to Bel Oil’s subsidiary in Poland Bel Oil Polska, according to a new loading schedule for Iranian crude in February, seen by Reuters.

Bel Oil will ship the Iranian crude oil to either the Black Sea port of Odessa or the Baltic port of Ventspils for rail transportation to Belarus, with the logistics yet to be agreed, two trading sources told Reuters.

It was not possible to immediately identify a vessel that will carry Iranian barrels for Bel Oil, but traders that it will be loaded around Feb. 20 from Kharg Island.

Belarus imported a total of 560,000 tonnes of sweet Azeri Light and CPC Blend crude oil via the port of Odessa supplied by Azerbaijan’s SOCAR in 2016 to cope with lower Urals supplies, Reuters trade flow system shows. But these shipments stopped in January as Belarus looked for a sour grade to replace Urals.

Russia cut crude oil exports to Belarus to 18 million tonnes in 2016 from an initial planned 24 million. In January-March 2017 Russian crude oil exports schedule from Belarus was set at 4 million tonnes, which equals 18 million per year, but Russia is threatening to cut crude supplies to 12 million tonnes per year, Belarus President Alexander Lukashenko said.

Belarus has complained that a gas price of $132 per 1,000 cubic metres set by Russian gas group Gazprom in the past few months is too high and has been paying less for gas deliveries since the start of last year. Russia has said Belarus owes around $300 million in gas payments.