Russia plans to supply only 4 million tons of crude oil instead of 4.5 million tons to Belarus in the first quarter of 2017. According to the Russian business daily Kommersant, the unresolved row over the price of the Russian gas supplied to Belarus in 2016 is behind the cuts.
By the end of 2016, Minsk and Moscow failed to reach an agreement on the payments for Russian gas. From January 2016, Belarus did not pay for the supplied gas at the contractual price but at the price it deemed fair. As a result, Belarus' arrears amounted to almost $425 million by November 2016 according to Russian government's calculations.
In response, Russia cut crude oil supplies to Belarus from the committed 5.3 million tons down to 3.5 million per quarter and down to 3 million tons in October - December 2016.
The side initially expected to resolve the dispute by the end of the last year. They agreed that crude oil supplies to the refineries in Belarus would increase up to 4.5 million tons in the first quarter of 2017. Russia had reportedly agreed to subsidize Belarus at the cost of the increased customs duties on crude paid to the Belarusian budget. In return, Belarus was to pay off all the arrears. However, the deal did not happen after Minsk wanted further concessions in the form of a loan, according to Kommersant.
Effective from February 1, 2017, Belarus will charge more for the transit of Russian crude oil via its territory.