Bulgaria shifts to Iraq and Tunisia for oil supply amid Russian embargo, Reuters

Bulgaria has lifted the European Union embargo, allowing it to continue maritime imports of Russian oil until 2024. However, starting this month, the country has restricted the export of all oil products made from Russian oil, making it practically impossible for its sole oil refinery to use Russian oil.

The decision to halt all imports of Russian crude oil was made in March.

Details about the refinery

Bulgaria procured oil to supply its Burgas oil refinery, with a capacity of 190,000 barrels per day, operated by the Russian company Lukoil. Bulgaria became the fourth-largest buyer of Russian seaborne oil in 2023, purchasing over 100,000 barrels per day.

However, this month, Russian oil will not reach the port of Burgas. As Lukoil can no longer supply the Burgas refinery with its own Ural grade oil, the refinery has to use oil from other sources, increasing costs for the plant.

Lukoil may sell the refinery in Bulgaria

It is noted that in January, Burgas is expected to receive two shipments of Kazakh oil (KEBCO), one shipment of Basrah Light, and one shipment of CPC Blend, a total of 33,000 tons of oil from Tunisia.

Lukoil has stated that it is reviewing its strategy regarding assets in Bulgaria and will consider the possibility of selling them.

Effectiveness of sanctions

The effectiveness of sanctions has decreased due to inadequate monitoring and compliance with the oil price limitation policy, allowing Russia to sell its oil at prices higher than the established restriction level, according to the authors.

In addition, the legal loophole in oil refining allows oil products made from Russian crude oil to legally enter other countries and regions worldwide. This primarily concerns India, which has significantly increased its oil imports from Russia.

Earlier, U.S. Treasury Secretary Janet Yellen stated that Washington was preparing to take tough measures for violating the established price ceiling for oil.