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Exclusive: Belarus's Lukashenka, Weary Of Russia Union, Seeks To Buy U.S. Crude


Belneftekhim has been under U.S. sanctions since 2007.

Belarus is seeking to buy U.S. oil for its refineries for the first time as it strives to diversify supplies away from its more powerful, energy-rich neighbor Russia and build warmer relations with the West, RFE/RL has learned.

The interest in U.S. crude comes as Moscow voices greater interest in pursuing a union with Belarus, a project that has remained dormant for the past 20 years but that the Kremlin wants to revive.

The state-owned Belarusian Oil Company, which is affiliated with the refiner Belneftekhim Concern, has hired David Gencarelli to lobby the U.S. government for sanctions relief so the country can buy crude.

Gencarelli will assist the company in getting a special license from the U.S. Treasury Department for the "purchase of crude oil with delivery to the refineries in the Republic of Belarus," according to a Foreign Agents Registration Act filing.

Gencarelli, who has worked as a lobbyist for nearly three decades, did not immediately reply to a request for comment. Gencarelli's clients, including those in the energy industry, "have, with this help, navigated the Halls of Congress" and federal agencies, he wrote on his social media page.

Siarhei Nahorny, senior counselor for trade and economic affairs at the Belarusian Embassy in Washington, did not immediately respond to a request for comment on the filing.

Belarus buying oil from a Kremlin foe “is a political message aimed at Russia,” said Michael Carpenter, former U.S. deputy assistant secretary of defense, who now is a senior director at the Penn Biden Center at the University of Pennsylvania.“This is a hard slap in Putin’s face.”

Russia, the world's second-largest oil producer, has kept Belarus within its sphere of influence by offering the nation cheap energy and loans that have propped up its outdated economy for decades.

Russia sells its Urals brand of crude to Belarusian refineries at its domestic price, which is below world market prices. Belarusian refineries then export most of the oil products, pocketing higher profits.

Refining accounts for a significant portion of Belarus's economic output and export revenue, with its refining capacity far exceeding its domestic needs.

However, Russia is in the process of ending that practice by 2024, leaving Belarus vulnerable to Russian pressure for a union.

Belarusian President Alyaksandr Lukashenka has lashed out against Russia’s oil policy change, saying it cost Moscow “its only ally” in the West.

The authoritarian ruler has said he wants to cut Russia's share of trade from roughly one-half to one-third. Importing U.S. oil would be one way of achieving that goal.

“I think they would want to have the option anyway, but it would be a form of leverage. ‘You want to cut our subsidy -- we will buy our oil from the Americans,’” Jeff Mankoff, deputy director and senior fellow of the Russia and Eurasia Program at the Center for Strategic and International Studies, told RFE/RL.

Lukashenka is seeking to speed up a resumption of relations with the United States, Carpenter said, pointing out that Minsk and Washington are in the process of reestablishing ambassadors.

Middle Eastern or Nigerian oil would be a more suitable alternative than U.S. oil, said Anton Korytsko, an energy analyst at Moscow-based Alfa Bank. The U.S. produces a type of crude that differs in sulfur content compared with the Urals blend that Belarus is used to refining.

U.S. oil "wouldn’t be ideal due to a likely mismatch in input qualities and capacities for gasoline-focused processes as Urals is heavier and the composition of the product yields differs somewhat," he said.

Lukashenka said in May during a visit to energy-rich Kazakhstan that he would like to diversify his country's oil imports. The comment came amid problems caused by contaminated Russian oil. Belarus has in the past imported some oil from Venezuela and Azerbaijan, but Russia still accounts for nearly all crude imports.

U.S. oil production has more than doubled over the past decade to a record 12.3 million barrels a day in August. The surging output enabled Washington to end a ban on crude exports in 2016.

U.S. crude was exported to Ukraine for the first time ever in July. However, Belarus's ability to tap U.S. energy is impacted by sanctions.

Washington first imposed sanctions on Minsk in 2006 to punish it for "undermining democratic processes" in connection with unfair presidential elections. Those sanctions were widened a year later to include Belneftekhim.

The United States began to waive the sanctions against Belneftekhim for a renewable period of six months starting in 2015 after Lukashenka permitted election monitors and freed some political prisoners.

A new waiver will be needed as of October 25, the filing said.

Gencarelli will seek to arrange a meeting in September or October "with representatives of U.S. government agencies involved in a license issue decision-making process” to receive another waiver, the filing said.

He will receive $60,000 for his lobbying work.

Should Gencarelli be successful, Belarus could hire him to help lobby for "the complete lifting of sanctions against Belneftekhim Concern and its enterprises," the filing said.

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    Todd Prince

    Todd Prince is a senior correspondent for RFE/RL based in Washington, D.C. He lived in Russia from 1999 to 2016, working as a reporter for Bloomberg News and an investment adviser for Merrill Lynch. He has traveled extensively around Russia, Ukraine, and Central Asia.