It’s No Surprise if Russian Oil continues to sail into Bulgarian Ports​

By Thea Dunlevie

On June 1, 2023, the Panama-flagged oil tanker New Amorgos docked at Rosenets Port terminal in the Bulgarian port of Burgas, completing its voyage from Russia’s port of Novorossiyk. Two Bulgarian vessels approached the tanker, then likely left crews to transfer the oil to the refinery site of LUKOIL Neftochim Burgas, previously owned by Russia and temporarily nationalized by the Bulgarian government after Russia’s 2022 invasion of Ukraine, via pipeline. This transaction serves as a reminder to the European Union and the North Atlantic Treaty Organization that, although Bulgaria is a member of both, they probably should not expect Bulgaria’s entanglement and seaborne energy trade with Russia to end anytime soon.

Figures 1 and 2. The New Amorgos docking at the Bulgarian port of Burgas on June 1, 2023. Screen captures from  Marinetraffic.com and Maxar satellites on June 2, 2023.

Figure 3. LUKOIL Neftochim Burgas refinery site located near the port of Burgas, Bulgaria. Screen capture from Maxar satellites on June 2, 2023.

Bulgaria and Russia? It’s complicated. The Bulgarian people register some of the greatest neutrality towards or blatant support for Russia’s invasion of Ukraine, according to recent polling. The Bulgarian economy, society, and government remain intertwined with Russia, exemplified in part by how Bulgarian cars and machinery are largely powered by diesel derived from Russian oil. In 2022, Bulgaria became Russia’s third largest customer for its crude oil. And the previously Russian-owned LUKOIL company, a subsidiary of PJSC LUKOIL, has operated what is known to be the Balkans’ largest oil refinery, near Bulgaria’s port of Burgas, since 1999.

In 2022, while most EU states blocked imports of Russian oil, Bulgaria was granted an exemption until 2024, allowing it to import and process but not export Russian oil products for profit. Ironically, Bulgaria supplied an estimated 40% of Ukraine’s fuel needs last year with refined Russian oil, worth more than €700 million euros. Bulgaria’s exports offered life-support to Ukraine, including to its agricultural industry, by fueling farm equipment to process Ukraine’s major export items. (LUKOIL’s national headquarters maintains that no diesel has been sold to Ukraine – only to internal buyers in Bulgaria). But since then, Bulgarian diesel exports have started to decline, and Ukraine has increased imports from alternative suppliers, including the U.S., Turkey, Poland, and Azerbaijan. Meanwhile, Bulgaria is scrambling to replace Russian oil imports for domestic consumption before the looming 2024 EU deadline sets in, when tankers carrying Russian oil should no longer be accepted into Bulgarian ports.

However, we should not expect Bulgaria to rip off the Band-Aid so quickly. Europe has struggled to assemble a patchwork quilt of stable, non-Russian energy sources, after Russia leveraged Nord Stream 1 pipeline gas flows for political purposes, threatened to cut off energy exports unless payments were received in rubles, and as countries have banded together to sanction Russian energy exports. Bulgaria is also left in the lurch, since its domestic biodiesel production alone does not meet internal demand.

Several alternative solutions, like routing gas through various pipeline routes, have been proposed. Yet several of the “cleaner” energy suppliers still turn to Russia when their energy supplies begin to dwindle: namely, Turkey and Azerbaijan. As we approach 2024, Bulgaria will be compelled to turn to an increasingly-strained Turkey and Azerbaijan when they are already supporting Europe’s nominally non-Russian energy needs. But oil field operators in Azerbaijan are already expressing concern about meeting existing demand.

Effectively, the EU’s impending deadline offers Bulgaria three options: 1) Import oil from Azerbaijan and Turkey, still risking some Russian oil imports, where supply exists 2) Continue to import Russian oil, perhaps more covertly or 3) A combination of options #1 and #2. These are the immediate options, since building out the Solidarity Ring pipeline network, to import energy resources from the Caspian Sea region, will take many years to finalize at scale. These decisions stand alongside other challenges, too, like EU’s broader mission to move away from fossil fuels and the impending 2024 winter where energy prices will spike, like in 2022.

In the world where Bulgaria nominally halts import of Russian oil products by 2024 or even if the government appeals to the EU for an extended exemption for Russian oil due to dependency, it will be necessary to surveil for illegal Russian ship-to-ship transfers occurring away from Bulgarian ports. EU allies should also keep eyes on vessels flying flags of convenience and docking at Bulgarian ports, as Russian exporters seek to avoid logistical barriers. These sanction-evasion tactics have been documented off the coastlines of European and African nations in order to obscure the products’ Russian origins before export to their final destination, and they could be used to export oil to Bulgaria, if Bulgaria seeks to disguise the source of its energy imports, due to pressure from allies.

It is increasingly important to be looking forward to 2024, when the threat of fuel shortages could impact Bulgaria’s calculus about petitioning to extend its grace period for importing Russian oil, due to regional strains. Considering how Bulgaria fits into Ukraine’s diesel supply chain and the broader European energy supply chain is an often overlooked but essential factor in advancing an EU and NATO-oriented mindset within Bulgaria, one of the alliances’ most stressed and torn members, and supporting Ukrainian victory by undermining Russian energy sales.

Thea Dunlevie is a Senior Analyst at the Center for Maritime Strategy focusing on transatlantic affairs.