Workers challenge Belarus' Lukashenko

  • Market: Crude oil, Fertilizers, Oil products
  • 17/08/20

Growing unrest among workers in Belarus has developed into strikes and protests at industrial sites across the country, increasing evidence that president Alexander Lukashenko's position could be weakening.

Workers at Belarusian state-owned potash producer Belaruskali's mine began halting production today, after issuing a list of demands that would have to be met before production could resume, which included freeing political prisoners, the resignation of Lukashenko and holding new elections. The Belarusian opposition had called for a nationwide general strike to take place today and in the coming days, following on from a mass protest in the capital Minsk yesterday.

Workers from other industries appear to have taken part in strikes throughout the day, unverified footage on social media channels such as Telegram and Twitter suggests, including workers at steelworks and automobile factories. Lukashenko visited the MZKT factory — which produces large vehicles for industrial and military purposes — on the outskirts of Minsk this morning, where he addressed workers. Lukashenko was met with boos and chants of "leave!" during his speech, in which he said "as long as you have not killed me, there will be no new elections," in response to complaints that the 9 August presidential election was unfair and should be held again, footage seen by Argus showed.

It remained unclear if strikes had broken out at either of Belarus' two oil refineries — 220,000 b/d Novopolotsk and 323,000 b/d Mozyr — today. Protests were held on 14 August outside the gates of the two refineries, while workers at the Mozyr facility appeared to have threatened to strike during the hours 12:00-15:00 from 20 August onwards if demands are not met. State-owned refining concern Belneftekhim denied reports of strikes at its refineries last week, and said that the refineries were working normally and there was then no impact on production or crude receipts.

Belarus exports oil products from terminals in Baltic ports, as well as exporting products overland to neighbouring countries. State-owned BNK exported as much as 1.32mn t of oil products — around 1.07mn t of fuel oil and 250,000t of gasoline — from the Baltic Sea terminals of Klaipeda and Ventspils over January-July. And around 360,000t of gasoline and 770,000t of diesel were delivered to Ukraine. Russia can also be an importer of Belarusian gasoline, but the Russian energy ministry imposed a ban on imports of gasoline and other fuels until October to protect the country's refineries. Imports of Belarusian gasoline into Russia had been at their highest for several years in April.

The European gasoline market remains oversupplied, which a reduction in Belarusian refinery capacity if strikes were to take place would be unlikely to impact significantly. Oversupply, and high stock levels, have pressured gasoline values relative to crude oil. Eurobob oxy gasoline barges have averaged a $1.50/bl premium to North Sea Dated so far in August, down from $2.68/bl in July and $12.46/bl in August 2019.

Belarusian refineries receive most of their crude from neighbouring Russia, with as much as 5.75mn t (450,000 b/d) scheduled to be delivered by pipeline from Russia in the third quarter. But a price dispute at the start of this year pushed Belarus to seek crude from elsewhere — it has received cargoes of US and Saudi crude through Baltic terminals.

The emergence of industrial action in support of demonstrators is the latest challenge to Lukashenko's rule, after a week of protests and clashes with riot police across the country following the 9 August presidential election, in which Lukashenko claimed a landslide victory with around 80pc of the vote.

The international community has begun to react to the political situation in Belarus. The EU's diplomatic service, the European External Action Service (EEAS), issued a statement today saying it is working on "new listings for sanctions against those responsible for violence, repression of peaceful protests, and the falsification of election results". And UK foreign secretary Dominic Raab said "The UK does not accept the results of this fraudulent presidential election" on Twitter this morning.


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