A number of refiners in the Mediterranean are avoiding potential disruptions in Russian crude supplies amid the invasion of Ukraine, following years of diversification and increased reliance on crude from the Middle East.
Croatia’s Rijeka refinery on the Adriatic Sea processes only light crude that it buys on the Mediterranean market. Operator INA said, since Urals is not in that category, it does not expect “disruptions in the supply of the Rijeka Refinery” and its customers.
Italy’ Saras, which operates a refinery in Sardinia, said that it has “no exposure to Urals and to Russian crude”, however, it has been indirectly affected due to surging oil prices.
Feedstock supply
Several refineries in the region rely on Russian feedstock. Portugal, for instance, imported no Russian crude in 2020 but 568,000 mt of intermediate products, according to data from the country’s energy department DGEG.
Portugal’s Galp CEO Andy Brown said in the week ended Feb. 25 that European refiners would be in “uncharted territory” if vacuum gasoil supplies from Russia were disrupted. The VGO exported from Russia is used as a feedstock for further processing in secondary units, such as hydrocrackers and fluid catalytic crackers.
Another refiner in the Mediterranean, Greece’s Hellenic Petroleum, said that it regularly imports Russian VGO and straight run fuel oil, but its exposure to Russian crude was only 15% of supplies in 2021, and it could be easily replaced, mostly with Middle East grades.
Some Mediterranean refiners do not perceive the feedstock imports from the Black Sea as indispensable for production.
Spain’s imports of refinery products from Russia amounted to 1 million mt in 2021, with three quarters diesel and one quarter fuel oil, with the latter typically used for further processing.
Spain imported 2.5 million mt of crude from Russia in 2021, or only around 4% of Spanish crude inflows, according to reserve corporation CORES.
East Mediterranean impact
Israel’s Bazan said it has not seen any impact on its Haifa refinery from “the tension between Russia and Ukraine.”
Azerbaijan’s Socar said that its Star refinery in Turkey “considers feedstock supply opportunities from all legally available suppliers.”
Turkey’s Tupras said in a recent investor presentation that out of the 21 crude slates it purchased in 2021, 61% came from the Middle East, 21% from the Commonwealth of Independent States, 7% from Europe and 11% from Africa. The refiner has reduced its dependence on crude arriving from the CIS compared with the pre-pandemic levels in 2019, when it amounted to 34% of its slate, while increasing imports from the Middle East from 55% in 2019.
Data produced by Turkey’s energy regulator EPDK showed that the sharp rise in Middle East volumes and the corresponding decline in the CIS volumes between 2019 and 2021 was due specifically to an increase in imports from Iraq and a fall in imports from Russia.
Imports of Russian crude to Turkey rose 66.4% year on year to 5.42 million mt in 2021, but declined 48.1% from 2019, according to EPDK. The sharp drop in Russian imports from pre-pandemic levels was mirrored by a sharp rise in volumes from other CIS countries.
Turkey’s supplies from Kazakhstan rose 36% year on year in 2021 to 4.52 million mt, up 42.1% from 2019. The country’s imports from Turkmenistan fell 23.3% year on year to 662,696 mt in 2021 but gained 35.7% from 2019. Its inflows from Azerbaijan were up 102% from 2020 and 31.2% from 2019 at 501,186 mt in 2021.
Source: Platts