BAKU, Azerbaijan, January 24. Three Aframax-type tankers under the flag of Azerbaijan - "Karabakh", "Shusha" and "Zangezur" were operated by the State Oil Company of Azerbaijan (SOCAR) from November 2023 through January 2024 to deliver oil from Russia's Primorsk to the Turkish Nemrut Bay Port, Trend reports.
SA Maritime AFEZCO, a joint venture of Azerbaijani Caspian Shipping Company CJSC (ASCO) and SOCAR state firms, purchased the tankers last year, with a capacity of 70,000 to 120,000 tons of oil.
Previously, ASCO's fleet consisted largely of smaller vessels aimed at Caspian Sea ports, where the firm works primarily. ASCO, on the other hand, plans to acquire more large oil tankers capable of functioning in foreign markets between 2024 and 2026.
In 2023, ASCO increased its oil and oil product traffic by 50 percent compared to 2022, to 4.9 million tons. ASCO officially announced the increase on January 23 but clarified that Aframax-type tanker traffic was not included in that volume.
"Aframax-type vessels are given to charterers on a long-term lease, and the main customers of transportation are SOCAR, while ASCO is not involved in the commercial operation of the vessels," Reuters said.
Last autumn, SOCAR signed an agreement with Russia's Lukoil to supply about 100,000 bpd of oil to the STAR refinery in Türkiye (owned by SOCAR).
"The deal with Lukoil allows SOCAR to provide feedstock for half of the refinery's capacity with oil discounted due to sanctions, and the use of Azeri tankers will help save even more," traders told Reuters.
The cost of transporting oil from Russian Baltic ports to Türkiye on the open market costs charterers about $5 million per Aframax-type tanker, one trader estimated.
Freight rates for Russian oil shipments have surged since 2022 after the Group of Seven (G7) countries imposed a price ceiling of $60 per barrel to limit the Kremlin's revenue from crude exports. Since then, freight rates have fallen but remain multiples of the rates for oil shipments not restricted by sanctions.
Fulfilling the price ceiling condition for Russian crude allows Western companies to provide delivery and insurance services for Russian oil.
The new Aframax class tankers are insured by Azerbaijan's PASHA Insurance, while reinsurance of the Shusha and Karabakh vessels was previously provided by Norway's Hydor AS.
Hydor noted that the insurance for "Karabakh" and "Shusha" vessels was provided until December 1, 2023, and was not extended.
The company specified that each client considering oil transportation from Russia must undergo a full sanctions review, including providing evidence that volumes sold are below the price ceiling.
It was not possible to ascertain the company that reinsured the three Aframax vessels, and ASCO stated that they operate in strict compliance with all international sanctions.
