Russian oil imports: How will the exemption for Bulgaria affect the refinery in Bourgas?

In addition to the price cap on Russian oil, the derogation that Bulgaria will use for the import and processing of Russian oil delivered by sea comes into force today, December 5. But to what extent will it have an effect?

The Russian oil price ceiling will have no effect on the Kremlin, energy expert Kostantsa Rangelova explained.

"At $60 a barrel, the Russian budget is balanced and there is no deficit. A level of $40, $50 would have some slightly more serious effect," she said.

According to Rangelova, the measure has an administrative but not a real effect. At the same time, fears of fuel shortages have led to rising prices on international markets.

"In terms of Brent the increase is by over 2%, in terms of Urals it is over 3%," said Hristo Kazandzhiev, Bulgarian Energy and Mining Forum.

Regarding the exemption Bulgaria received from the European Commission, experts believe the state should exercise control over the refinery's operations, but it remains questionable whether it will do so.

Rangelova commented that before the embargo was introduced the refinery used only 50% Russian oil and after the derogation - 100% Russian oil.

"If this was a normal economic company, the most normal thing in this situation was to start importing non-Russian oil and avoid all these problems, but here we are in a situation of politically motivated decisions and threats from Lukoil," Kostantsa Rangelova said.

However, Bulgaria should not violate the adopted European regulation and export domestically produced products from Russian oil.

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In June, 2022, Bulgaria received a requested exemption, which allowed it to import Russian crude oil and petroleum products via maritime channels to its Black Sea coast until the end of 2024. There was no exception, however, for exporting Russian oil or products derived from it.