Belarus refiners reduce throughput as sanctions pressure rises

Belarus' two refineries, Mozyr and Naftan, with combined capacity of some 450,000 b/d, are having to reduce throughput because of pressure from sanctions, Prime Minister Roman Golovchenko said April 7, quoted by state media.

Belarus is a sizable East European refiner, reliant on Russian crude, and before the invasion of Ukraine was a significant exporter of oil products to its southern neighbor.

But Ukraine has barred imports from Belarus since the start of Russia's invasion Feb. 24. And the landlocked country's access to other European neighbors was already curbed by sanctions before the invasion, including access to the Lithuanian port of Klaipeda on the Baltic Sea.

While the US and its partners have not imposed additional sanctions on Belarus' oil sector since the invasion, Belarus had already become reliant on Russian ports for its exports, and the ports are now being shunned by much of the European industry. Russia's Urals crude exports now sell at a steep discount to the Dated Brent benchmark.

The country of just over 9 million people is closely allied to Moscow and has provided territorial, logistical, and other support to Russia's invasion of Ukraine, according to media reports.

Golovchenko, confirming reduced run rates at Belarus' refiners, said, "once the situation stabilizes and exports can increase, the refineries' throughput will increase."

He added that the two plants—one close to the border with Ukraine and one in the north—continue to supply the Belarusian market while making no mention of supplies to the Russian market.

Western countries already imposed sanctions on Belarus including its refining industry in 2021 following a crackdown on political dissent after disputed elections. Lithuania blocked access to the port of Klaipeda in December 2020, prompting Belarus to switch to Russia's ports in the Gulf of Finland.

Since the invasion, the US has imposed new financial and defense sector sanctions on Belarus. And the UK has targeted specific individuals and military enterprises in Belarus under what it called a "first tranche" of sanctions.

The US, meanwhile, has banned Russian oil imports and the UK has vowed to phase out Russian oil imports by the end of the year, with the UK also banning Russian ships from its ports.

Major oil companies, such as Shell, and trading companies, such as Glencore, have also vowed to stop taking Russian oil.

Currently, Naftan, in northern Belarus, is processing 11,700 mt/day, or around 85,000 b/d, of crude and Mozyr about 13,700 mt/d.

By comparison, Mozyr processed 8.99 million mt in 2020, or around 24,000-25,000 mt/d, the report also said.

Ukrainian supply

Belarus was the biggest source for Ukraine's oil product imports before the invasion, accounting for 41.9% of the country's total oil product imports, with Belarus supplying 3.87 million mt of petroleum products worth $2.35 billion in 2021.

Over the past month, Ukraine, which heavily relies on imports of gasoline, diesel, and LPG, has started importing products from Lithuania and Poland, with at least 22,000 mt of diesel delivered from Poland in the week ending April 2.

In addition, Azerbaijan, the US, and Germany have agreed to step up supplies to the country.