Russia and Belarus sign new oil deal

Weeks of talks on a new crude oil agreement have finally borne fruit, Deputy Prime Minister Igor Sechin reported to President Dmitry Medvedev.

“An array of documents was signed today with Belarus, including updates to the oil agreement, the balance of crude oil in 2010 and a joint statement of two Deputy Prime Ministers guaranteeing an uninterrupted oil supply,” Sechin said.

Though Russia had to make some concessions to its western neighbour, according to Sechin, all the agreements were “in line with the interests of Russian companies”.

Previously, oil supplies to Belarus were regulated by an intergovernmental agreement, signed back in January 2007, which gave Belarus duty-free prices for oil and its derivatives intended both for domestic use and transit.

Since most of the Russian oil Belarus received was resold to Europe, it earned some $2 billion just through these oil discounts in 2009.

After the previous agreement expired on January 1, 2010 Russia began to collect a 100% duty from exports to Belarus, which increased the price on oil by 50%.