Belarus suspends Klaipeda oil product exports

16/12/2020 08:34 Oil Market

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Belarus appears to be halting oil product exports through the Lithuanian port of Klaipeda in what may be a politically-motivated move.

Oil terminal operator Klaipedos Nafta (KN) says that Belarusian products exporter BNK notified it at the start of this week of a planned temporary suspension in exports through the outlet. Belarusian oil products are shipped to KN under a contract running until the end of next year, but the latter says fulfilment of contractual obligations has been suspended "indefinitely".

 

KN commercial director Mindaugas Navikas said on 15 December that "the client's decisions may not be dictated by economic logic, but by political logic that we cannot control". From an economic point of view, the terminal in Klaipeda is "the most attractive for export… of Belarusian oil products," Navikas said.

 

Belarus has considered switching products shipments to Russian ports and away from Klaipeda because of Vilnius' support for the Belarusian opposition movement. In September, Belarus and Russia announced that they were working on shipping Belarusian oil products through Russian Baltic ports, but this option is $10-15/t more expensive than using ports in the Baltic states, according to market participants.

 

Some product is still on route to the Lithuanian terminal from Belarus, KN says. A BNK source says that oil products that have already been sold will be delivered through Klaipeda, but that shipments through other Baltic ports may now rise.

 

Trading firm Glencore had a contract to buy fuel oil from Belarus' 323,000 b/d Mozyr refinery on a fob basis at KN in November 2019-October 2020, market participants say. Around 665,000t of Belarusian products were loaded on tankers chartered by Glencore's shipping subsidiary ST Shipping in January-November.

 

KN has also handled gasoline from Mozyr this year, with supplies of about 481,000t in January-November, although even before this week spot volumes were being offered without the option of delivery through Klaipeda. Buyers of Mozyr gasoline include Trafigura, Vitol, BP and Gunvor.

 

source:argusmedia.com

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