Urals oil supplies to Turkiye jump in Feb as STAR refinery resumes Russian crude imports

Supplies of Russian flagship, Urals crude oil, to Turkiye reached a four-month high in February after STAR refinery, owned by Azerbaijan’s oil firm, SOCAR, resumed purchases of the blend, data showed and four industry sources said on Wednesday.

Sea-borne Russian oil supplies are subject to an embargo by the European Union and the price is capped by the West to $60 per barrel over Moscow’s actions in Ukraine, Reuters reports.

Increase of Russian oil exports to Turkiye, which Russia considers as a friendly country despite Ankara’s NATO membership, may hinder the West’s attempts aimed at crippling Kremlin’s financial might and weakening its military efforts in Ukraine.

Russia’s oil exports revenue is set to rise in March as falling freight rates and strong demand push Russian oil prices towards a $60 per barrel Western price cap.

According to Refinitiv Eikon ship tracking data, 860,000 tonnes of Urals crude were shipped to Turkish ports last month, up from 620,000 tonnes in January and 370,000 tonnes in December.

Supplies of Russian oil to the 200,000-barrel-per-day STAR refinery resumed at the end of January after a month-long hiatus and reached 100,000 tonnes in January and at least 300,000 tonnes in February, according to the data and industry sources.

SOCAR Trading, that manages supply of the refinery, declined to comment.

In 2022, when Europe drastically cut energy imports from Moscow, demand for Urals crude in Turkiye was robust. Its peak supplies in August-October reached between 1.3 million tonnes and 1.4 million tonnes per month, including 700,000 tonnes a month destined for STAR refinery.

Increase in Urals crude supplies to Turkiye will likely bolster the price of the Russian blend, making India and China, which already saw record-high oil imports from Russia, compete for the Russian oil volumes with Turkiye, traders said.

Moscow’s oil export revenues fell by 40 per cent, year-on-year in January, Russia’s Finance Ministry has said, as Russian crude was sold at discounts of $15-$20 per barrel to China, India and Turkiye, and shipping it also cost $15-$20 per barrel.

READ: Turkiye already has capacity to become energy hub