Azerbaijan's SOCAR postpones purchases of Russian oil for Turkish refinery

ECONOMICS  09 December 2022 - 12:27

Azerbaijan's state oil firm SOCAR has paused purchases of Russian crude oil for its Turkish refinery, industry sources said, in a sign, Western sanctions are starting to hit steady streams outside Europe and the United States.

An EU embargo on Russian seaborne crude oil imports took effect on December 5 along with a ban on the use of EU shipping services for the transportation of Russian oil bought above a Group of Seven (G7) price cap of $60 a barrel, per Reuters.

Turkish refineries, including SOCAR's 214,000 barrel-per-day (bpd) STAR plant, had increased purchases of Russian crude after Russia's invasion of Ukraine in late February, a more lucrative trade for Russian producers than Asia owing to the countries' proximity.

Türkiye has not joined the price cap agreement, and Russian companies could sell oil to the country without regard to this restriction.

However, Russian flows to Turkey began falling last month to their lowest since February, according to Refinitiv Eikon data, and a source said SOCAR was reviewing the situation in order to remain compliant with Western sanctions. SOCAR's Geneva-based trading arm manages crude supplies for STAR.

Flows of Russia's main export grade Urals to Turkey were 170,000 bpd in November, down from over 300,000 bpd in each month from August to October, according to Refinitiv Eikon ship tracking data.

The STAR refinery took only 73,000 bpd in November down from 170,000 bpd in the previous three months, while the last parcel for the STAR refinery departed on November 20, the data showed.

Caliber.Az