The 18th sanctions package adopted by the European Union in July bans the import of petroleum products produced from Russian crude oil into the EU market, including refining in third countries. These restrictions also apply to the Turkish SOCAR STAR refinery and Azerbaijani tankers.
Anita Hipper, a spokesperson for the EU External Action Service, explained that the ban is aimed at “preventing any possibility of Russian crude oil entering the EU market.” In other words, exporting fuel products produced from Russian oil, including at state-owned refineries, to the EU would constitute a violation.
The bill also provides for port bans for approximately 100 tankers belonging to the so-called Russian “shadow fleet.”
The Role of the STAR Refinery and the Scale of Imports
The STAR Refinery, a joint venture between Azerbaijan and SOCAR in Turkey, has long been associated with dependence on Russian oil. Since the end of 2023, the volume of Russian crude oil imported to STAR has increased sharply.
According to a study by Global Witness, in the first quarter of 2024, more than 90% of the oil used at STAR was supplied by Russia, and the refinery’s total Russian crude imports during this period amounted to $1.2 billion. By comparison, this amount was only $500 million in the same period in 2022.
In the context of gas agreements and loan arrangements, in the fall of 2023, the Russian company Lukoil provided SOCAR with a $1.5 billion loan, in exchange for which Russian crude supplies to STAR were resumed.
According to Reuters, this deal enabled Azerbaijan to repay a $1.3 billion loan to American banks Citi and JP Morgan early, allowing the STAR refinery to resume importing Russian oil. As a result, in the fall of 2023 and early 2024, STAR effectively switched to using Russian oil as its primary source of feedstock.
Statements by EU officials
EU Foreign Service spokesperson Anita Hipper confirmed in a comment to OC Media that the STAR refinery is subject to sanctions under the 18th package. Hipper emphasized that the purpose of this package is to restrict activities that support Russian oil:
“If the STAR refinery uses Russian crude oil to produce products that will be exported to the EU, this will be prohibited. The goal is to completely prevent Russian crude oil from entering the EU market.”
Therefore, the EU’s top priority is to disrupt oil supplies to Europe via STAR.
Accusations of “Rebranding” and Statements from Baku
Since the beginning of the war in Ukraine, Azerbaijan has been repeatedly accused of “rebranding” Russian oil and gas, that is, presenting them as Azerbaijani when entering the European market.
Although such rumors regularly appeared in the media, Baku categorically denied them. For example, in 2024, Hikmet Hajiyev, press secretary of the presidential administration, refuted reports from Kazakh sources that Azerbaijan was importing gas from Russia, explaining that these were merely exchange transactions.
Regarding STAR, official Baku has consistently denied accusations of spreading false information. Currently, the Azerbaijani government has made no official comment regarding the sanctions against STAR.
Azerbaijan’s Tanker Fleet and Oil Transportation Routes
Research shows that the Azerbaijan Caspian Shipping Company (ASCO) has deployed new Aframax oil tankers to service the STAR refinery in Turkey.
According to OCCRP, the Azerbaijani-flagged tankers Zangezur, Shusha, and Karabakh transported oil from the Russian port of Primorsk to Turkey’s Gulf of Nemrut several times last year. Under EU sanctions that took effect in July 2025, the tanker Shusha, followed by Karabakh (on July 18), were added to the sanctions list. Both vessels have been operating under the Azerbaijani flag since the summer of 2023 and have primarily operated on the Primorsk-Nemrut route in recent months.
The tanker Zangezur was sanctioned by the UK in May of this year as part of measures against the “shadow fleet,” and was soon also banned at the EU level.
OCCRP notes that this 115,000-ton Aframax is wholly owned by the state-owned Caspian Shipping and transported oil from Primorsk to Nemrut 11 times last year.
Another Azerbaijani Aframax tanker, the Khankendi (formerly Aristofanis), also began sailing under the Azerbaijani flag in the fall of 2024 and currently uses the same route.
According to available information, the Khankendi may be included in the next sanctions package. Currently, four of ASCO’s six tankers—Zangezur, Shusha, Karabakh, and Khankendi—are used on the Russian oil route.
Research Organizations React: Global Witness and OCCRP
International research and anti-corruption organizations have prepared detailed reports on the transportation of Russian oil in Azerbaijan and its processing at the STAR refinery.
Global Witness expert John Noronha-Gant stated:
“Azerbaijan was supposed to replace Russia in Europe’s supply chain, but instead it has become a backdoor for Putin’s oil. This trade undermines EU sanctions against Russian oil and generates billions of dollars for the Azerbaijani authorities.”
He also noted that Brussels’ decision to restrict oil from refineries like STAR is “very good news.”
In an OCCRP report, expert Maximilian Hess (US Foreign Policy Institute) emphasized that the inclusion of Zangezur on the sanctions list sends a serious signal to Azerbaijan:
“This is a clear warning: Azerbaijan’s attempts to circumvent sanctions against Russia pose serious risks to its diplomatic position and economy.”
In other words, at a time when Azerbaijan is seeking to cement its role as a reliable energy partner for the West, such accusations pose a threat of diplomatic isolation.
Consequences and Prospects
For Azerbaijan, the current situation poses both geopolitical and economic challenges. Baku is seeking to play an important role in diversifying fuel supplies to Europe. For example, Azerbaijani natural gas is supplied to the EU only through the TANAP-TAP gas pipeline.
In April of this year, European Commissioner for Energy Kaja Kallas stated during a visit to Baku: “Azerbaijan has helped diversify the EU’s energy supply and strengthen our security.” However, a number of experts are now noting that many oil pipelines running through Azerbaijan are actually transporting “Putin’s bloody oil.”
Observers warn that this situation could undermine trust between Azerbaijan and Europe and lead to tensions in diplomatic relations.
At the same time, alarming signals coming from Azerbaijan are also being discussed within Europe itself. Further adjustments to the EU’s energy cooperation with Baku are expected. Thus, SOCAR announced its intention to acquire Italiana Petroli, an Italian company with over 4,500 gas stations and two oil refineries, in the coming months.
According to some experts, Azerbaijan is seeking to strengthen its position both in natural gas exports and through similar investments, and will also begin to seek alternative markets and routes to reduce its dependence on Russian oil. In other words, in the future, Baku will likely have to focus more on the European market and build more transparent supply chains, which will help mitigate both trade and diplomatic consequences.
