Lukoil Pivots to Turkey with $1.5B Refinery Deal Amid Sanctions
10.06.2023 By Tank Terminals - NEWS

October 6, 2023 [Oil Price]- Russian Lukoil will lend $1.5 billion to Azerbaijan’s state-run Socar to enable its Turkish STAR refinery to receive Russian crude oil imports again, after sanctions-related financial restrictions forced a cut-off this summer, Reuters reported exclusively on Thursday.

 

As European refiners halted purchases of Russian oil under the sanctions regime, Lukoil, a private company, is seeking refining customers situated near Russian ports to recapture market share.

Socar’s STAR refinery in Turkey has a 200,000 barrel-per-day refining capacity, but halted Russian crude intake earlier this year due to Western sanctions. While Turkey has not signed on to the European Union’s sanctions rules and does not comply, financial restrictions have made it difficult for STAR to import Russian crude for refining.

Privately owned and operated Lukoil has not been subjected to Western sanctions to the extent that Russia’s state-run entities have. Lukoil has continued to operate gas stations, refineries and its own trading arm in Europe.

“Lukoil has very good lobbies … they have enablers in Brussels and across Europe,” Martin Vladimirov, senior energy researcher at Bulgaria’s Center for the Study of Democracy think tank, told Politico earlier this year. “They have convinced European policymakers that Lukoil is supporting Ukraine and the management of Lukoil is against the war.”

According to Reuters, citing LSEG Eikon data, STAR fully suspended imports of Russia’s flagship crude oil blend, Urals, in August-September and replaced volumes with Kazakhstan’s similar KEBCO blend.

Under the $1.5-billion deal, sources have told Reuters that Lukoil will begin deliveries of approximately 100,000 bpd to STAR this month. LSEG tanker tracking data cited by Reuters also shows three tankers hired by Lukoil currently en route to Turkey, loaded with Urals.

Despite Lukoil’s relatively easy ride through Western sanctions, last week, Bulgaria’s parliament backed a decision to gradually halt Russian oil imports over the course of the next 12 months, dealing a major blow to Lukoil’s refinery there, Bloomberg reports. Lukoil’s Bulgarian refinery, Neftohim, is the largest in southeastern Europe.

 

Pro Trial: Access 12,600 Tank Terminal and Production Facilities

12,600 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

UAE Invests Billions in AI to Diversify Economy Beyond Oil
11.13.2024 - NEWS
November 13, 2024 [Oil Price]- The United Arab Emirates’ state-owned energy giant Abu Dhabi Nat... Read More
Gulf Energy Transition: Assessing Saudi and Emirati Goals
11.13.2024 - NEWS
November 13, 2024 [The Washington Institute]- On October 29, during Saudi Arabia’s annual Futur... Read More
How will The Energy Sector Fare Under Donald Trump?
11.13.2024 - NEWS
November 13, 2024 [Investing Daily]- The energy sector experienced a notable boost following Dona... Read More
PNOC, Pertamina Partner on LNG Infrastructure, Supply Chain
11.13.2024 - NEWS
November 13, 2024 [Manila Bulletin]- State-run Philippine National Oil Company (PNOC) has signed ... Read More