The Russian oil and gas sector is a crucial revenue stream for the Kremlin, contributing 32% to the federal budget in 2023. G7+ countries have displayed little desire or political will to address glaring loopholes in the oil sanctions since the beginning of Russia’s full-scale invasion of Ukraine. Hence, the Kremlin has leveraged Turkish refineries to continue selling large volumes of petroleum products made from refined Russian crude to the EU and the U.S. Turkey expanded its dependence on Russian seaborne crude oil imports from around 34% in 2023 to 70% in the first half of 2024, taking advantage of a USD 5-20 per barrel discount for purchases of the Russian Urals crude blend.

This report reveals that G7+ countries imported EUR 1.8 billion worth of oil products derived from Russian crude, from three refineries in Turkey in the first half (H1) of 2024. For example, the Azeri owned STAR refinery is 98% dependent on Russian crude, with 73% of its crude imports supplied by the US sanctioned company Lukoil. 87% of its seaborne exports of oil products are directed to G7+ countries. The total volumes of crude oil processed by Turkish refineries to export oil products to EU and G7 countries have secured EUR 750 million in tax revenues for the Kremlin in the first half of 2024 alone. The most important step sanctioning countries should take is to ban the imports of oil products from refineries using Russian crude oil. This would enhance the impact of the sanctions by disincentivizing third countries from importing large amounts of Russian crude and thereby suffocate Russia’s search for new markets.