Exclusive: Turkey Saves $2 Billion on Russian Oil as Imports Soar Despite Sanctions
12.18.2023 By Tank Terminals - NEWS

December 18, 2023 [Reuters]- Turkey 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 neighbour despite Western sanctions.


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

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

Russia’s energy ministry declined to comment. Turkey’s energy ministry, Turpas and STAR refiner didn’t respond to requests for comments.

Supplies to Turkey are expected to rise further in the coming months after private Russian oil producer Lukoil signed a deal with Azeri firm SOCAR to refine up to 200,000-barrel-per-day of its oil at Socar’s Turkish STAR refinery, trading sources said.

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

Russia supplied to Turkey in January-November 13 million tonnes 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.

Turkey 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.

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

Multiple activists and supporters of Ukraine have accused Turkey of effectively helping Russia channel its products to Europe bypassing sanctions. The country denies the accusations and says it is exporting fuels refined from various types of crude.


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

India, which also refused to join sanctions against Moscow, has boosted imports of Russian oil by 77% so far this year. It has saved roughly $2.7 billion on Russian oil imports in the first nine of 2023, according to calculations based on government data. But India imported much larger volumes of Russian oil to the tune of 1.7 million bpd, meaning per barrel savings for Turkey were much higher.

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 Turkey compared to $9 million to India.

Kpler’s analyst Viktor Katona said Turkey’s refiners have become some of the most profitable plants in the Mediterranean since Russian sanctions have been imposed in February 2022.

Katona said Turkey’s largest oil refiner Tupras had a gross profit margin of $30 per barrer over the past year, $6 per barrel higher than the average margin for a complex refinery in the Mediterranean. Tupras said

Moscow and Ankara are also discussing setting up a hub for Russian gas in Turkey after the EU drastically reduced Russian gas purchases. The plan plays into Ankara’s long-held desire to become a major energy distribution hub for southern Europe.

Russia sees the hub as a way to re-route its gas exports from Europe or sell some gas into the EU indirectly.

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