Last week, Ukrainian media were flooded by news about the visit of US Secretary of State Mike Pompeo to Ukraine and his talks with President Volodymyr Zelensky. However, Ukraine is not the only former USSR country that the head of American diplomacy visited. From Kyiv, Pompeo went to Minsk.
The last time the US Secretary of State visited Belarus was 26 years ago. Then Pompeo was in Kazakhstan and Uzbekistan. American diplomacy intensified its activities in the post-Soviet space due to certain circumstances.
U.S. oil interests in Belarus
Pompeo met with President Alexander Lukashenko and Foreign Minister Vladimir Makei at the peak of the Belarus-Russia contradictions over energy prices. The Secretary of State supported the independence of Belarus, expressed his intention to fully supply the country with American oil at competitive prices, announced the need to lift sanctions and return the US ambassador to Minsk.
Since 2006, the US and the EU imposed sanctions against senior Belarusian officials in response to the persecution of dissidents and because of doubts about the transparency of elections. In 2008 the American ambassador left Minsk at the initiative of Lukashenko. In 2015, the sanctions were temporarily suspended due to the fact that Minsk began to play the role of a negotiation platform for resolving the conflict in eastern Ukraine.
The United States has chosen a convenient moment for building bridges with the leadership of Belarus. Russia and Belarus could not agree on oil supplies in 2020. The Russian authorities have introduced a tax maneuver that will allow oil export duties to be reduced to zero until 2024, but will make it possible to increase the mineral extraction tax. This is not beneficial for Belarusians, since they bought oil and natural gas from Russia without paying duties on preferential terms at prices lower than market prices, and due to the tax maneuver, energy carriers will be more expensive in any case.
Belarusians purchased 24 million tons of oil a year from Russians, which is 6 million tons more than the needs of local oil refineries (18 million tons a year). Excess oil was resold in foreign markets. By 2024, the price of Russian oil for Belarus will be equal to world prices.
In November 2019, Belarus bought Russian Urals brand oil at a price of $ 49.3, while on the world market it was trading for $ 63.34. Among Russian companies, oil continues to be supplied to Belarus by the Russneft and Neftis of businessman Mikhail Gutseriev.
The Russian authorities are trying to replenish the budget in the face of difficult economic realities. Benefits for “fraternal” Belarus cost too much. Earlier, Moscow imposed restrictions on the supply of petroleum products to Belarus, which were also resold at higher prices.
The Russian Federation expects Belarus to deeply integrate in the economic sphere, unify the tax system, introduce a single currency within the framework of the union state. Last year’s talks between Lukashenko and Putin on this issue were accompanied by protests in Minsk.
Washington is trying to extract purely economic benefits from the contradictions between Minsk and Moscow, hoping that Lukashenko will contribute to the conclusion of contracts for the supply of American oil to Belarusian refineries as an alternative to black gold from Russia.
The American oil industry was impressed by the recent agreement of the Belarusian Naftan company on the acquisition of 86 000 tons of oil in Norway. In 2010-2012, Belarus imported oil from Venezuela and Azerbaijan amid worsening relations with the Russian Federation. Now Lukashenko sets the goal of reducing dependence on Russian oil to 30-40%.
The Trump administration is lobbying for the interests of the American oil business and hopes to help Belarus develop its sales market. Since the lifting of the ban on oil supplies abroad in 2015, the United States began to export more oil than import.
In 2019, it exported 2.5-3 million barrels per day, and a third of this volume was shipped to European countries. Unlike his predecessors, Barack Obama and George W. Bush, Trump has little concern with respect for human rights or the lack of democracy in Belarus. First of all, he sees economic benefits in this country.
Pompeo believes that Russia is Belarus’s neighbor and long-term partner, and the United States will not give the Belarusian authorities a choice with whom to cooperate. Belarus is interesting to the Trump administration as long as there will be the task of diversifying the directions of oil imports. Americans will not shake the chair under Lukashenko. However, the supply of American oil to Belarus may remain at the level of talks due to the specifics of this country.
The main hindrance is the issue of price. The price per barrel of WTI American oil ($ 51.09), Mars US ($ 52.06) is not much lower than a barrel of Russian Urals ($ 54.85). And Louisiana Light ($ 56.19) costs even more.
It should be borne in mind that the delivery of American oil in tankers across the Atlantic and then its transit through the Baltic countries or Ukraine will cost Belarus more than deliveries of Russian oil via the Druzhba pipeline. Belarusians faced such a problem when they imported oil from Venezuela.
Purely technological factors play their role. Initially, Belarusian refineries were built to process Russian oil, which differs from the American one. They will have to be modernized to increase the depth of processing, which is less than in Germany.
All this will require additional funds. As of December 2019, the national debt of Belarus amounted to one third of GDP. Despite the consequences of tax maneuvers, Russian oil will cost Belarusians cheaper than American.
Most likely, Lukashenko is trying to use recent purchases of Norwegian oil, Pompeo’s visit as a tool for blackmailing the Kremlin to bargain for a discount. He is not ready for a real turn of Belarus’s foreign policy to the West, because in this case he will have to put an end to the semi-socialist system existing in the country.
Thanks to the meeting with Pompeo, the Belarusian leader demonstrated to the international community and his own citizens his self-sufficiency and independence. To a greater extent, this message is addressed to representatives of the Belarusian opposition, who advocate a change of power and rapprochement with the West, against the union state.
In the current context, protests of a pro-Western minority and their escalation into clashes with law enforcement agencies are dangerous for the Lukashenko regime. Amid the unrest, the Kremlin could carry out a coup in Belarus and put a more loyal leader at the helm of the country on the pretext of helping a military-political ally to combat "foreign interference".
In this scenario, Moscow acted in socialist Poland, Hungary in the 50s, and Czechoslovakia in 1968, which were part of the Warsaw Pact Organization, where the Soviet army was introduced. Belarus participates in the Eurasian Economic Union. On the territory of the republic there are military facilities of the Russian Federation - a communications center in Vileyka and a radar station in Baranovichi.
The price of energy is not the only problematic issue in relations between the two countries. Lukashenko opposes the deployment of a Russian air base near Bobruisk; he is cool about the prospect of Belarus "dissolving" in the Russian state, given the opinion of society.
According to the Institute of Sociology of Belarus, less than 7.7% of residents support unification with Russia. Most citizens (49.9%) support the preservation of independence of Belarus and the development of relations with Russia on the basis of international law.
American game in Central Asia
Since the collapse of the Soviet Union, Americans have sought to strengthen cooperation with Central Asian states in the areas of energy, security, investment, and help strengthen regional integration without the participation of Russia and China, which also have a strong influence in this region.
Republicans continue the policies of ex-presidents Barack Obama and George W. Bush. In 2015, on the initiative of former US Secretary of State John Kerry, the "C5 + 1" format was created for regular meetings with the foreign ministers of Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan. During his visit to Tashkent on February 2-3, Mike Pompeo met with the foreign ministers of the Central Asian republics.
The Trump administration pays special attention to relations with Kazakhstan and Uzbekistan. During his tour, the head of the State Department met with Kazakh President Kassym-Zhomart Tokaev and his Uzbek counterpart Shavkat Mirziyoyev.
Americans are alarmed by the political course of the new president of Kazakhstan. One gets the impression that Tokaev is trying to strengthen relations between the republic and Russia and China, gradually moving away from the foreign policy model of ex-president Nursultan Nazarbayev, who maintained a balance in relations with Moscow, Beijing, Washington and Brussels. After the inauguration, Tokaev first visited Russia, Uzbekistan and China.
He opposes the spread of anti-Chinese sentiment in Kazakhstan in the context of contradictions between the US and China. The president does not focus on the issue of infringement of the rights of ethnic Kazakhs in China, where they are sent to special labor camps along with the Uighurs, does not consider Russia's actions in Crimea in 2014 an annexation.
Tokaev is trying to turn Kazakhstan into a bridge between Russia and China, to influence the rapprochement of the two nuclear powers. At a forum in Omsk last year, Tokaev and Putin agreed to modernize border crossings, improve the quality of transport infrastructure on the Russian-Kazakh border, which is necessary for the implementation of the transport corridors "One Belt, One Way", "North-South" (Russia - Central Asia - Iran - Suez Canal - Mediterranean Sea - Atlantic Ocean - Baltic Sea).
The Kazakh president advocates strengthening the yuan as a global currency, increasing bilateral trade and investment cooperation between Russia and China. From 2002 to 2018, Russia invested $ 14 billion in the economy of Kazakhstan, including in the oil and gas and mining and metallurgical sectors, and China ranks 4th among investment partners.
These circumstances are alarming for the United States, which has 400 enterprises in Kazakhstan and has invested $ 40 billion in the local economy, mainly in oil production. Pompeo met with Tokaev and Nazarbayev and made it clear that they would benefit more from working with the Americans than with the Chinese and Russians. American investors are ready to invest from 500 thousand to 1 billion dollars in the creation of only one meat processing plant in Kazakhstan, and to finance various startups. Washington is trying to outbid the Kazakhs from Moscow and Beijing.
Pompeo met with the President of Uzbekistan Shavkat Mirziyoyev, on whom the United States relies in strengthening its influence in Central Asia. Mirziyoyev positions himself as a progressive leader and reformer, carries out modernization of the country, attracts foreign investment, while maintaining an authoritarian style of government. He is trying to make Uzbekistan a regional leader, to unite other republics around it.
Unlike his predecessor Islam Karimov, Mirziyoyev makes attempts to resolve territorial disputes with neighboring countries, regularly holds meetings with their leaders. Uzbekistan is interesting to Americans as a route for transporting military supplies to Afghanistan, as an alternative to unstable Pakistan. The United States is impressed that Uzbekistan, unlike Kazakhstan, is in no hurry to embrace Russia. Since 2012, the country suspended its membership in the CSTO. Uzbekistan does not participate in the Eurasian Economic Union. Last year, Uzbekistan took part in the Russian Center-2019 military exercises. In Uzbekistan, Americans have shares in 200 enterprises.
In 2018, Washington and Tashkent entered into contracts worth $ 2.55 billion. There are plans to implement projects in the field of gas processing, textile production, and drug sales. American diplomacy has intensified in Central Asia to prevent this region from returning to the orbit of Russian influence and strengthening China's position.