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Would situation in Belarus affect oil products market in Ukraine?

Author : Serhiy Kuiun

Source : Facebook

Traders try to understand how mass protests would influence the supply of oil products from Belarus
23:20, 18 August 2020

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For a week now, traders have been trying to understand how mass protests would influence the supply of oil products from Belarus. The concern is reasonable: Belarus occupies more than 30% of our market, and 50% of the bitumen market.

While the oil refineries are operating, workers of the Naftan refinery announced that they would join the strike. The position of the second and main supplier of fuel to Ukraine – the Mozyr Oil Refinery – is still unknown.

I strongly doubt that something threatens the stability of the Belarusian refineries. Labor collectives cannot fail to understand that any destabilization of production would badly hit them first, not Lukashenko. Russia is the only one who can destabilize the situation, it provides the lion's share of raw materials. But I also see no motives for this, except that the situation is somehow strongly radicalized.

Related: Price of petrol, diesel fuel, autogas continue to fall in Ukraine

No matter how the situation with deliveries from Belarus develops, the maximum risks for us might be temporary, two-three-week turbulence: not a deficit, not a sharp jump in prices, but a temporary destabilization.

Firstly, we have been living with a huge surplus of diesel fuel and gasoline for half a year. Traders sell it to zero at best, the market is so overwhelmed.

Secondly, the Ukrainian market is open for supplies. And this proves the importance of maintaining a diversified model, questioned by Ukrainian converters, proposing to introduce duties or quotas. Over the past year, the Russians have already "missed the mark" three times (August-September 2019), then the Belarusians (the first quarter of 2020), but due to diversification, these crises passed unnoticed for the end consumer. I am sure it will be so this time (again, if there is no crisis scenario, which I do not really believe in).

Related: Fuel prices reduce in Ukraine, what happens afterwards?

Bitumen is the only really problematic issue here. There are no chances to replace Belarusian volumes, and this is half of the market; Russian supplies are closed, and Ukrainian traders are just mastering sea imports. But unlike diesel fuel and gasoline, this is not a matter of strategic importance for the economy and life of the country.

Nothing, we'll build it later. Maybe, at the same time, the priorities will be revised in favor of strengthening the protection of the population from the coronavirus.

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Related: Fuel consumption in Ukraine to fall by 20-30%, - expert

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