Bulgarian authorities approved a ban on Russian oil supplies to the LUKOIL plant

The Bulgarian Parliament has approved a proposal to reduce the use of Russian oil at the local oil refinery (LUKOIL) to 80% by the end of 2023 and completely phase it out by October next year. This is reported by Bloomberg.

According to the publication, the decision will cause great damage to the LUKOIL Neftohim Burgas refinery and will force it to look for alternative raw materials. The most obvious option of switching to oil from Kazakhstan is impossible: suppliers of this country are already cooperating with Romania. According to Bloomberg, Bulgaria can also look for new exporters of raw materials among the countries of the Middle East and North Africa.

“To switch to non-Black Sea oil, the actual storage capacity needs to be significantly increased, perhaps doubling, so that the plant can potentially operate for 20-30 days without a tanker arriving,” said Bulgarian Finance Minister Asen Vasilev.

The publication says that over the past few weeks, supplies of Russian Urals oil through the Black Sea to Bulgaria have tripled – to 180 thousand barrels per day. The authorities’ decision to abandon Russian oil accelerates the process of diversifying energy supplies after the country relied solely on Moscow for oil, gas and nuclear fuel for many years, Bloomberg adds.

LUKOIL Neftohim Burgas is the largest refinery in South-Eastern Europe, accounting for about 9% of Bulgaria’s GDP. In 2022, the local government allowed LUKOIL to export to European countries until 2024, despite the embargo on oil and oil products from Russia.

The share of Russian oil supplies to EU countries continues to decline: in the second quarter in annual terms it amounted to 2.7% versus 15.9% last year. In the first quarter, the share of deliveries decreased by almost 23% year on year.

More details in the text “Kommersant” “Russian share in the EU oil and gas market is going to other suppliers”.

Petr Buzlaev