Turkey reduced Russian oil imports by half. Why?

By Samir Muradov

Turkey, being the third-largest importer of Russian oil, significantly reduced its oil imports in August 2024. The main reason is the scheduled preventive maintenance (SPM) at the STAR refinery near Izmir, which has already caused a drop in supplies from 400-450 thousand barrels per day to 200 thousand barrels per day. The maintenance will last for about two months, leading to temporary changes in oil flows to the Turkish market and possibly affecting the price of Urals crude oil.

The technical work at the STAR refinery, managed by the Azerbaijani company SOCAR, which handles about 45% of the Turkish market for Russian oil, began on September 5, 2024, and will continue for about two months. According to Kpler , Russian oil supplies to the Turkish port of Aliaga, where the refinery is located, decreased from 300 thousand barrels per day in June to 100 thousand barrels per day in August.

Although the reduction in oil imports to Turkey is not critical for Russian suppliers, it creates certain discomfort given the limited number of export regions. This pressure is also reflected in the price of Urals crude, with the discount in India increasing to $4 per barrel compared to the previous $3. The lost volumes are likely to be redirected to the Indian market, which could partially offset the losses.

It is expected that the situation will stabilize with the resumption of LUKOIL deliveries via the Druzhba oil pipeline in October 2024. Hungarian company MOL has already resolved issues with oil suppliers and pipeline operators, allowing the restoration of normal delivery volumes.



Another significant factor that could influence oil prices is Israel's ongoing military operation on Lebanese territory. The threat of geopolitical instability in the region could drive up global oil prices, increasing the attractiveness of Russian oil grades like Urals.

The STAR refinery is the largest private oil refining project in Turkey and meets about 20% of the country's demand for petroleum products. Its capacity is 200 thousand barrels per day, and the refinery processes oil grades such as Azeri Light, Kerkuk, and Urals. However, technical work at the plant may temporarily disrupt the stability of supplies to the domestic market.

Thus, the maintenance at the STAR refinery in the coming months will be a significant factor for both Turkish and Russian oil markets. At the same time, the potential escalation of geopolitical tensions in the Middle East further adds uncertainty regarding future oil price trends.

News.Az