Azerbaijan resells Russian oil and gas, bypassing sanctions - Google Search & AI: Sanctions Avoidance: By importing Russian gas for domestic use, Azerbaijan can continue to export its own gas to Europe without directly violating EU sanctions on Russian gas imports.
Azerbaijan resells Russian oil and gas, bypassing sanctions - Google Search & AI https://t.co/5OfMXpQ5rw
— Michael Novakhov (@mikenov) May 1, 2025
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Reports suggest Azerbaijan is importing Russian gas to meet its domestic demand, which then allows it to fulfill its export commitments to Europe, potentially including gas… pic.twitter.com/4A3ekytXIw
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Sanctions Avoidance: By importing Russian gas for domestic use, Azerbaijan can continue to export its own gas to Europe without directly violating EU sanctions on Russian gas imports.
Reports suggest Azerbaijan is importing Russian gas to meet its domestic demand, which then allows it to fulfill its export commitments to Europe, potentially including gas that was intended for domestic consumption
. Why this is seen as a potential circumvention of sanctions:
- Increased Azerbaijani Exports to Europe: Following Russia's invasion of Ukraine, the EU sought alternative gas suppliers, and Azerbaijan emerged as a key partner.
- Sanctions Avoidance: By importing Russian gas for domestic use, Azerbaijan can continue to export its own gas to Europe without directly violating EU sanctions on Russian gas imports.
- Indirect Benefit for Russia: While not a direct sale of Russian gas to Europe, this arrangement still benefits Russia by allowing it to sell its gas to Azerbaijan, maintaining its export revenues.
Azerbaijan's Perspective:
- Azerbaijan insists the Russian gas is for domestic consumption only and denies re-exporting it to Europe.
- Azerbaijan argues that its increased exports to Europe are facilitated by its own gas production and not by reselling Russian gas.
EU's Perspective:
- The EU acknowledges that Azerbaijan is not directly violating sanctions by importing Russian gas for its domestic use.
- However, some EU policymakers and analysts express concerns that the arrangement effectively allows Russian gas to reach Europe indirectly.
Important Note: The legality of Azerbaijan importing Russian gas for its own use is not disputed, as EU sanctions do not prohibit this. The issue lies in the potential for circumventing the intended impact of the sanctions on Russia's energy revenues.
While there are reports and concerns about Azerbaijan potentially helping Russia bypass sanctions related to oil and gas, there is no definitive proof that Azerbaijan is directly reselling Russian oil and gas under its own label to circumvent these measures.
Here's a breakdown of the situation:
Concerns and Allegations:
- Increased Trade: Following the imposition of sanctions on Russia, there has been a notable increase in trade between Azerbaijan and Russia. Some find this surge disproportionate to Azerbaijan's economic capacity, raising suspicions.
- Russian Gas Imports: Azerbaijan has increased its imports of natural gas from Russia.
1 While officially stated for domestic consumption, some analysts speculate that this could free up more of Azerbaijan's own gas for export to Europe, indirectly benefiting Russia. - STAR Refinery: A significant portion of the crude oil processed at the STAR refinery in Turkey, co-owned by Azerbaijan's state oil company SOCAR, is reportedly of Russian origin. The refined products are then exported to the EU. This has led to accusations that Azerbaijan is acting as a "back door" for Russian oil to enter Europe.
- Gas Swap Arrangements: There have been discussions and potential arrangements where Russian gas could flow to Europe under an Azerbaijani label, effectively circumventing sanctions.
- Statements by Officials: Azerbaijani President Ilham Aliyev has explicitly denied claims of reselling Russian gas as "fake news." He stated that the limited gas purchased from Russia was a purely commercial decision due to favorable pricing at a specific time.
Azerbaijan's Position:
- Azerbaijan officially states that any gas imports from Russia are for its own domestic use.
- The country is increasing its own gas exports to Europe and aims to become a more significant energy supplier to the continent.
- Azerbaijan has expressed a willingness to facilitate the transit of gas between Russia and Ukraine if it can help European countries maintain their energy supply, emphasizing its role as a facilitator rather than engaging in speculation.
Overall Context:
- Europe is actively seeking to diversify its energy sources and reduce reliance on Russia.
2 Azerbaijan is seen as a potential partner in these efforts. - The energy relationship between Azerbaijan, Russia, and Europe is complex and influenced by geopolitical factors and energy security concerns.
- While direct evidence of large-scale relabeling of Russian oil and gas by Azerbaijan is lacking, the increased trade and the flow of Russian crude through Azerbaijani-owned facilities raise questions about potential indirect circumvention of sanctions.
It's important to note that the situation is fluid, and ongoing monitoring and analysis are necessary to fully understand the extent to which sanctions might be bypassed through Azerbaijan or other routes.
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Azerbaijan has been involved in importing Russian gas, which has raised concerns about its role in European energy security. A recent deal between Azerbaijan and Russia allows Baku to import gas from Russia, potentially freeing up Azerbaijani gas for export to Europe. This arrangement has led to questions about whether Azerbaijan is indirectly facilitating Russian gas sales to European markets despite sanctions.
Additionally, Azerbaijan has become a key transit hub for Kazakh oil exports as Russia's role declines. Western sanctions on Russia have had repercussions for Azerbaijan, affecting trade relations and financial transactions between the two countries.
Would you like to explore how this impacts global energy markets?
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There is evidence suggesting Azerbaijan has been involved in reselling Russian oil and gas, potentially bypassing Western sanctions imposed on Russia due to its invasion of Ukraine. Here’s a concise overview based on available information:
- Oil Reselling: Azerbaijan has reportedly facilitated the flow of Russian oil to European markets by routing it through its infrastructure. For instance, the state-owned SOCAR has used tankers to transport Russian crude oil from the Baltic port of Primorsk to Turkey’s STAR refinery, which is owned by SOCAR. In Q1 2024, over 90% of the crude oil processed at STAR came from Russia, with the EU importing over 1.2 million tonnes of oil products from this refinery, making it the largest buyer of STAR’s seaborne oil products. This trade has raised concerns about undermining EU sanctions, as Russian oil products may be entering Europe indirectly through Azerbaijan. Additionally, Azerbaijan has increased its imports of Russian crude, with estimates suggesting monthly purchases of around $40 million in 2024, generating significant tax revenue for Russia.
- Gas Reselling: Azerbaijan has been accused of importing Russian gas to meet domestic demand or for reinjection into oil fields, allowing it to export more of its own gas to Europe. In 2022, Azerbaijan agreed to import Russian gas to fulfill its commitments to the EU, which aimed to reduce reliance on Russian gas through a deal to double Azerbaijani gas exports by 2027. Reports indicate that Azerbaijan’s gas exports to Europe may include Russian gas, as its domestic production and smaller fields are insufficient to meet both domestic needs and export targets. For example, the Shah Deniz field, a major source of Azerbaijan’s gas exports, is partly owned by Russia’s Lukoil, which stands to profit significantly from increased exports to the EU. This has been described as a “gas laundering” operation, where Russian gas is mixed with Azerbaijani gas for resale.
- Sanctions Circumvention: The EU has not imposed sanctions on Russian gas, and Azerbaijan is not bound by EU sanctions, giving it the freedom to import Russian energy. However, the practice of reselling Russian oil and gas contradicts the EU’s goal of reducing dependence on Russian energy. The EU’s reliance on Azerbaijan as an alternative energy supplier has led to muted criticism of these practices, despite accusations of Azerbaijan acting as a “back door” for Russian fossil fuels. The involvement of Russian companies like Lukoil in Azerbaijan’s energy infrastructure, such as the Shah Deniz field and the South Caucasus Pipeline, further complicates efforts to curb Russian energy influence.
- Sentiment on X: Posts on X reflect mixed sentiments. Some users claim Azerbaijan is reselling Russian gas to Europe, accusing the EU of overlooking this to secure energy supplies, while others, including pro-Azerbaijan accounts, deny these allegations, asserting that Azerbaijan does not help Russia evade sanctions. These claims are inconclusive without further evidence.
- Counterpoints: Azerbaijan’s Ministry of Foreign Affairs and some EU officials have denied that Russian oil is exported to the EU via the Baku-Tbilisi-Ceyhan pipeline, emphasizing compliance with international regulations. Azerbaijan’s strategic role as an energy partner for the EU, coupled with its agreements to expand gas exports, may explain the lack of strong EU pushback against these practices.
While Azerbaijan’s actions appear to facilitate the flow of Russian energy to Europe, the extent to which this constitutes deliberate sanctions evasion is debated. The EU’s energy needs and Azerbaijan’s geopolitical leverage as a supplier have so far limited scrutiny of these arrangements. For further details, sources like Global Witness (https://www.globalwitness.org) and Politico (https://www.politico.eu) provide in-depth analyses.
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