UPDATE 1-Belarus says ready to supply Ukraine with oil products

Mon Aug 4, 2014 6:26am EDT

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MINSK Aug 4 (Reuters) - Belarus is ready to supply Ukraine with oil products, Belarussian President Alexander Lukashenko told his Ukrainian counterpart Petro Poroshenko on Monday.

Belarus has two major refineries but gets the bulk of its oil from Russia, which annexed the Crimea peninsula from Ukraine in March and is now under Western sanctions.

"Alexander Lukashenko stressed that Belarus understands the acuteness of this problem during the harvesting campaign and therefore, despite domestic needs, will assist Ukraine in ensuring its economy has oil products," the Belarussian president's administration said in a statement after the two leaders spoke on the telephone.

In May, Russia, Belarus and Kazakhstan signed an agreement to form the Eurasian Economic Union which Russian President Vladimir Putin had hoped would rival China, the United States and European Union as an economic power.

Moscow agreed to ship, duty-free, 23 million tonnes (169 million barrels) of oil this year to Belarus as a part of a customs union agreement. In return, Belarus exports oil products, the duty on which it pays to Russia.

Ukraine, one of the world's key grain exporters via the Black Sea, is currently in the middle of a harvesting campaign which could be undermined by rising fuel prices, officials say. (Reporting by Andrei Makhovsky; Writing by Polina Devitt and Katya Golubkova, editing by Elizabeth Piper)

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