Türkiye saves $2 billion on Russian oil as imports soar despite sanctions - Reuters

Türkiye and Turkish companies have saved around $2 billion on energy bills in 2023 by raising imports of discounted Russian oil and refined products, Reuters calculation based on LSEG data and traders' estimates showed, and Ankara wants to buy more from its neighbor despite Western sanctions.

Türkiye became the biggest importer of Russian energy in the Western hemisphere after Russia's war with Ukraine triggered European countries to halt most imports of Russian oil and gas. China and India have imported larger volumes from Russia than Türkiye, but Ankara's proximity to Russian ports, however, means it is saving more than other buyers thanks to cheaper freight, Reuters reports.

Russian Urals crude oil shipments to Türkiye rose to an all-time high of 400,000 barrels per day (bpd) in November 2023, accounting for some 14 per cent of Russia's overall seaborne oil exports last month, LSEG data and Reuters calculations showed.

On top of rising crude supplies, Türkiye’s imports of Russian diesel, heating oil, jet and marine fuel jumped 200 per cent in January-November 2023 to some 0.29 million barrels per day.

Russia supplied to Türkiye in January-November 13 million tons of distillates including 8.6 million tons of ultra low sulphur diesel (ULSD 10ppm) compared to 4.3 million tons of distillates including 3.2 million tons of ULSD over the same period of 2022, LSEG data showed and traders said.

Türkiye has been paying between $25 and $150 less for a ton ($3.3-20 per barrel) of Russia diesel this year compared to prices for similar grades in the Mediterranean, according to traders. For crude, it had discounts of between $5-20 per barrel. Cheaper energy imports have helped Ankara narrow its trade deficit and lessen pressure on its currency, which devalued 30% so far this year.

Türkiye has also increased exports of diesel over the same period by 120 per cent to 6.03 million tons from 2.75 million in January-November 2023, according to LSEG data.

Türkiye is not unique in enjoying big savings on Russian oil purchases.

Traders said the savings can be made on freight rates as they estimate it currently costs $6 million to bring a tanker with Russian oil to Türkiye compared to $9 million to India.