Azeri oil company Socar has made an early repayment of a $1.3 billion syndicated loan led by U.S. banks Citi and JP Morgan, two years ahead of schedule. This move coincided with Socar receiving a loan of a similar amount from Russian oil giant Lukoil. While Citi, JP Morgan, and Socar refrained from commenting on the early redemption of the U.S. bank-led loan, the transactions raised eyebrows among industry observers. Despite assurances that the deals did not breach financial sanctions, the timing of the repayments allowed Moscow to resume crude sales to Socar’s Star refinery in Turkey. The resumption of Russian oil purchases by Socar at Star, following a hiatus prompted by concerns over sanctions, underscores the complex interplay between financial institutions, energy markets, and geopolitical pressures. The strategic significance of the Star refinery, capable of processing 200,000 barrels per day, as a major player in European refining adds further layers to this intricate financial and diplomatic dance. Amidst shifting dynamics in global oil trade and mounting tensions between the U.S., Russia, and Turkey, the early loan redemption and subsequent agreements highlight the delicate balance of interests at play in the energy sector.
Azeri Oil Firm Socar Repays US Bank Loans Early After Receiving Russian Funds