Ukraine, which is de facto at war with Russia, got a five-year gas transit contract with Russian energy giant Gazprom, and will likely get a 25 percent discount for direct supplies of Russian natural gas. Belarus, which is Russia’s only ally in Europe and the only country, apart from Serbia, that did not impose sanctions on Moscow, got a two-month gas contract and is expected to pay higher prices for Russian gas and oil in 2020.
The Kremlin sees both, Ukraine and Belarus, as important transit countries for Russian natural gas supplies to Europe. Unlike the West-backed Ukraine, which is fighting a war against Russia-backed insurgents in the Donbass, Belarus is officially Russia’s ally and a member of the Moscow dominated the Collective Security Treaty Organization, as well as the Eurasian Union. However, Belarusian President Alexander Lukashenko is gradually distancing his country from Russia, even though he is still trying to strike a balance between the Kremlin and the Western powers. He is scheduled to meet with the United States Secretary of State Mike Pompeo, who recently reiterated Washington’s commitment to a “sovereign and independent” Belarus. Minsk and Washington are actively working on improving their relations, almost 14 years after the US and the European Union imposed sanctions on Belarus due to Lukashenko’s crack down on opponents following the 2006 presidential election that Western observers declared neither fair nor free.
Moscow, on the other hand, is pressuring Minsk to deepen the Russia Belarus Union State integrations, and is constantly threatening to increase gas and oil prices for Belarus. In December, Lukashenko and Russian President Vladimir Putin discussed the future of the Union State but they failed to reach an agreement. The Kremlin insists on deepening integration that should include a unified parliament, a common government, customs, currency, judicial and tax systems, which is something that Lukashenko strongly opposes as he wants to protect Belarusian sovereignty, as well as his nearly absolute power. Last year, he even refused to host Russian air base on Belarusian territory, and this year Belarus is expected to hold joint exercises with NATO.
There is very little Russia can do about Belarusian foreign policy. It can increase gas and oil prices and stop subsidizing the Belarusian economy, but even then Lukashenko will be unlikely to make concessions to the Kremlin. Belarus, as well as Ukraine, Poland and the Baltic states, might start importing liquefied natural gas from the United States, which will definitely affect the country’s budget. In a mid-term, in case Russia stops providing cheap gas and oil to Belarus, citizens of this country will become poorer, but their leadership will be unlikely to give up the country’s sovereignty.
If Lukashenko takes a firm stance, just like Ukraine did, he might even force Moscow to make concessions to Belarus. According to Russian Prime Minister Dmitry Medvedev, the gas contract agreed between Russia and Ukraine for the next five years is a “compromise” that had to be reached. In reality, however, Russia agreed on all terms and conditions that the European Union and Kiev proposed during the gas talks in December. Originally, Moscow offered a short-term gas transit deal to Ukraine, small amount of gas that should go to Europe through Ukrainian territory, as well as low gas transmission tariffs. According to the agreement that Ukrainian Naftogaz and Ukrainian Gazprom signed, Ukraine got a five-year contract, 65 billion cubic meters of gasoline will be sent through Ukraine in 2020 – which is what the European Union and Ukraine insisted on – and 40 billion cubic meters in the years following. Finally, Ukraine will likely increase gas transmission tariffs, and if Naftogaz resumes direct purchases of Russian gas, prices will be linked to a European hub rather than dictated by a Gazprom formula.
On the other hand, Russia and Belarus have reached an agreement on gas prices for just the first two months of 2020. Aleksei Miller, the chief executive officer of Russia’s state-owned gas giant Gazprom, and Belarusian Ambassador to Russia Vladimir Semashko signed the deal shortly before the existing contract expired at midnight on New Year’s Day. Since Belarus still does not have strong support from the EU and the US, the Kremlin can pressure and blackmail its only ally in Europe. However, in the long term, Russia risks losing Belarus not only as an ally, but also as an important gas transit country. If that happens, there is no doubt that the Kremlin will try to portray it as another magnificent geopolitical victory, and also as part of Putin’s cunning plan that not many people can understand.
Image credit: Magnascan