Russian Urals crude oil shipments to Türkiye rose to an all-time high of 400,000 barrels per day (bpd) in November 2023, accounting for some 14% of Russia’s overall seaborne oil exports last month, LSEG data and Reuters calculations showed.

Russia’s Energy Ministry declined to comment. Türkiye’s Energy Ministry, Tüpraş and STAR refinery didn’t respond to requests for comments.

Supplies to Türkiye are expected to rise further in the coming months after private Russian oil producer Lukoil signed a deal with Azerbaijan’s state oil company SOCAR to refine up to 200,000 barrels per day of its oil at Socar’s Turkish STAR refinery, trading sources said.

On top of rising crude supplies, Türkiye’s imports of Russian diesel, heating oil, jet and marine fuel jumped 200% in January-November 2023 to some 0.29 million barrels per day.

Russia supplied Türkiye in January-November 13 million tons of distillates, including 8.6 million tons of ultra-low sulfur diesel (ULSD 10ppm), compared to 4.3 million tons of distillates including 3.2 million tons of ULSD over the same period of 2022, LSEG data showed and traders said.

According to traders, Türkiye has been paying between $25 and $150 less for a ton ($3.30-$20 per barrel) of Russian diesel this year compared to prices for similar grades in the Mediterranean. For crude, it had discounts of between $5-$20 per barrel. Cheaper energy imports have helped Ankara narrow its trade gap and lessen pressure on Turkish lira.

Türkiye has also increased diesel exports over the same period by 120% to 6.03 million tons from 2.75 million in January-November 2023, according to LSEG data.

However, Türkiye is not unique in enjoying big savings on Russian oil purchases.

India, which also refused to join sanctions against Moscow, has boosted imports of Russian oil by 77% so far this year. It has saved roughly $2.7 billion on Russian oil imports in the first nine of 2023, according to calculations based on government data. But India imported much larger volumes of Russian oil to the tune of 1.7 million bpd, meaning per barrel savings for Türkiye were much higher.

Traders said the savings could be made on freight rates as they estimate it currently costs $6 million to bring a tanker with Russian oil to Türkiye compared to $9 million to India.

Kpler’s analyst Viktor Katona said Türkiye’s refiners have become some of the most profitable plants in the Mediterranean since Russian sanctions were imposed in February 2022.

Katona said Türkiye’s largest oil refiner, Tüpraş, had a gross profit margin of $30 per barrel over the past year, $6 per barrel higher than the average margin for a complex refinery in the Mediterranean.

Moscow and Ankara also discussed setting up a hub for Russian gas in Türkiye after the EU drastically reduced Russian gas purchases. The plan plays into Ankara’s long-held desire to become a major energy distribution hub for southern Europe.

Russia sees the hub as a way to re-route its gas exports from Europe or indirectly sell some gas into the EU.