Azerbaijan's crude oil exports through the Baku-Tbilisi-Ceyhan (BTC) oil pipeline restarted after a six-day halt due to the devastating earthquakes in southern Turkey on February 6.
Operations at the Ceyhan terminal, on Turkey's Mediterranean coast, resumed on February 12, with the first tanker carrying Azerbaijani crude departing the following day.
The BTC pipeline itself was found to be undamaged following the quakes but damage to the Ceyhan terminal's control room meant it was unable to load the crude oil onto waiting tankers and the oil had to be pumped into storage tanks pending repairs.
Following Russia's invasion of Ukraine, Azerbaijani oil exports through two other pipelines to the Black Sea were suspended due to fears over the safety of tankers operating in the east Black Sea, leaving the BTC pipeline as Baku's only export route.
News that oil exports from Ceyhan had been restarted was followed on February 15 by a release of data by Azerbaijan's State Customs Committee showing the extent to which the European Union is now looking to replace its Russian imports with Azerbaijani crude.
Baku does not normally release such detailed information on the destination of its crude oil exports. It appears keen to be seen as helping Europe meet the challenge of replacing crude oil from Russia, which since December 5 has been subject to a raft of EU sanctions.
These include a total ban on the imports of Russian crude delivered by tanker, and a price cap of $60 per barrel on crude delivered by pipeline ($26 per below the current price for benchmark Brent crude).
According to the Azerbaijani customs data, 67 percent of the 2.246 million tons of crude oil exported by Azerbaijan in January went to eight European Union countries.
Although no comparative data was released, this is believed to be significantly higher than exports to EU members in the months before sanctions were imposed.
In all, Europe imported just over 1.5 million tons of Azerbaijani crude in January; the bulk went to Italy which alone imported 849,000 tons, 37.8 percent of Azerbaijan's total exports for the month.
Europe's other importers of Azerbaijani crude oil in January were Germany, with 146,000 tons, the Czech Republic, Ireland, Romania, Austria, Greece and Spain.
The other 33 percent of Azerbaijan's January oil exports went to Israel, India, Vietnam and Turkey, none of which are imposing sanctions on Russian crude and all of which normally import oil from Azerbaijan.
Before Moscow sent its troops into Ukraine, Russia was the world's second biggest exporter of crude oil, supplying 29 percent of the EU’s oil imports in 2020.
Over 90 percent of that crude was delivered by tanker, which the EU sanctions now outlaw, presenting Europe's oil refiners with an unprecedented challenge.
Many refineries across Europe are largely dependent on Russia for their supplies of crude oil, and some are or were even owned by the Russian oil companies supplying the oil.
Of the 27 EU countries only refineries in Bulgaria and Croatia have been granted temporary waivers to continue their imports of Russian crude by tanker.
Italy's biggest refinery, the ISAB plant, which boasts a fifth of all of the country's refining capacity, is located on the island of Sicily where it is supplied solely by tanker.
Considering the EU sanctions, it is likely to be the destination of the bulk of the Azerbaijani crude imported by Italy in January.
ISAB is also owned by Russia's biggest oil company, Lukoil.
In December the Italian government announced it was putting the ISAB plant under state administration in order to comply with the sanctions regime.
The following month Lukoil announced it had agreed to sell ISAB to GOI Energy, a subsidiary of the Cyprus-based private equity fund Argus, with the sale expected to be concluded in March.
That, coupled with the continuing EU sanctions policy, suggests the plant will continue to be a customer for Azerbaijani crude for some time.
Refineries in Germany were likewise heavily dependent on imports of Russian oil made via the Druzhba pipeline network, which runs through Belarus and Poland.
Berlin announced in September that it was nationalizing refineries belonging to Russian oil giant Rosneft, which account for 12 percent of the country's refining capacity. This month they are expected to start receiving deliveries of crude oil from Kazakhstan delivered via the Druzhba pipeline.
If successful, the supply of Kazakh crude to Germany by pipeline is expected to reduce Germany's need for Azerbaijani crude oil as long as the pipeline continues to operate.
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