New Sanctions on Russian Oil Reshape Turkish Supply Chains

A view of TUPRAS Izmit Refinery. Photo Credit: İsa Karakuş

The European Union’s decision on July 18 to adopt its 18th package of sanctions against Russia has echoed across global energy markets, thrusting Ankara into a balancing act between economic opportunity and compliance with Western restrictions. Central to the new measures is a lowered, semi‑annual “floating” price cap on Russian seaborne crude, set at 15% below the six‑month average market value, or roughly $47.60 per barrel, accompanied by an explicit ban on imports of petroleum products refined from Russian crude, regardless of processing location.

From the outset, Slovakia’s objections under Prime Minister Robert Fico nearly derailed the package. Bratislava vetoed the measures in mid‑July, demanding legally binding guarantees that it would not suffer from parallel EU plans to phase out Russian gas supply by 2028. With Gazprom contracts running until 2034 and potentially exceeding €20 billion, Fico insisted on assurances covering emergency gas supplies, transit fees, price stability, and a “crisis brake” mechanism before lifting his holdout. Those assurances were delivered in writing by EU officials around July 15, and Slovakia formally dropped its veto just days later, allowing the sanctions package to proceed.

As the EU aims to close loopholes that have allowed Russian oil to reach global markets, the economic stability of countries like Türkiye and India, which have been significant importers of Russian crude, is highly affected. Following the EU, the US administration has indicated a shift towards the possibility of imposing secondary sanctions on nations that continue to engage in trade with Russia, which signals a new concerted effort by Western powers to exert economic pressure on Russia. This move aims to potentially accelerate a resolution to the ongoing conflict in Ukraine despite recent internal challenges within Ukraine complicating this external pressure.

President Volodymyr Zelenskyy's recent signing of a controversial law that undermines the independence of anti-corruption agencies has sparked widespread protests across the country as critics argue that this move plays into Russia's hands by destabilizing Ukraine internally. The EU has expressed concern over these developments, emphasizing the importance of maintaining democratic reforms against Ukraine's efforts to join in. Concurrently, the U.S. has approved $322 million in proposed weapons sales to Ukraine, including advanced air defense systems and armored vehicles, to improve its defense capabilities in the face of escalating Russian attacks.

Even as the EU celebrated unanimity, attention turned to how third‑party refiners, particularly in Türkiye and India, might attempt to evade the refined‑products ban. European customs authorities have made clear they will scrutinize “rules of origin” documentation and may resort to chemical testing, on‑board inspections, and documentary audits to prevent Russian‑origin fuels from slipping into the EU market under false labels. Officials in Brussels are also prepared to blacklist vessels, insurers, and trading firms caught facilitating these shipments, a move designed to close the so‑called loophole that has allowed Moscow to sustain exports through opaque ship‑to‑ship transfers.

In Ankara, Türkiye Petrol Rafinerileri A.Ş. (Tüpraş) has quietly evaluated dedicating its İzmir refinery exclusively to non‑Russian crude, with an eye on exporting gasoline, diesel, and jet fuel to Europe without fear of seizure or blacklisting. Such a carve‑out would signal Türkiye’s willingness to align with EU enforcement, preserving market access and the wide margins enjoyed by regional refiners when buying discounted Russian Urals crude. Tüpraş itself had halted Russian imports early this year under intense US pressure, only to resume purchases in April when Urals prices tumbled well below the G7 cap of $60 per barrel. April cargoes destined for its İzmit facility underscored the financial incentive: gross refining margins on Urals have approached $30 per barrel, allowing Tüpraş to save an estimated $2 billion in 2023 energy costs.

Should Tüpraş abandon its İzmir carve‑out and continue processing Russian crude for export to the EU, Brussels has made clear it will invoke its newly tightened customs regime. Imports of suspect fuel shipments could be summarily rejected at EU ports, with cargoes detained and import licenses revoked. Deterring European insurers and shipowners from providing services could effectively disrupt the logistical chains necessary for transporting Turkish-refined products westward. Such actions would mirror sanctions placed on Indian refiners like Nayara Energy, 49% owned by Rosneft, which have already seen tankers diverted away from Vadinar following EU designation and export bans.

India’s experience illustrates the wider stakes. New EU rules targeting fuels made from Russian crude are scheduled to take effect no later than January 21, 2026, forcing major exporters such as Reliance Industries and Nayara to “walk a fine line” between energy security and access to European markets. Analysts warn that without credible proof of crude origin, Indian shipments could face rejection or delays, eroding a $15 billion export business that underpinned New Delhi’s energy strategy in 2024.

For Ankara, the situation remains complex. Türkiye is the world’s third‑largest buyer of Russian oil, importing more than 400,000 barrels per day in June alone. Cheap Urals have relieved domestic energy costs and freed up local refinery throughput for exports, but continued reliance on Russian crude risks EU trade retaliation at a time when Türkiye is seeking closer ties with Brussels. EU policymakers would likely welcome any move to carve out İzmir for non‑Russian supply as evidence of Türkiye’s constructive engagement. Conversely, failure to do so may invite swift regulatory countermeasures, including customs enforcement, blacklistings, and insurance bans that could jeopardize one of the country’s most profitable industrial sectors.

As the new sanctions regime takes effect, the interplay between Brussels, Bratislava, Ankara, and New Delhi will test the EU’s capacity to enforce unanimity‑based measures against a backdrop of strategic energy partnerships. Unlike the U.S. Office of Foreign Assets Control (OFAC), the EU lacks a central enforcement agency. This limits Brussels’ capacity to investigate and penalize violations consistently across borders which could limit the capacity of the new sanctions against Türkiye. Meanwhile, Slovakia’s last‑minute concession demonstrates the lengths to which member states will go to protect national interests, but the EU’s broader aim is clear: to sever Russia’s oil revenue lifeline by choking off every conceivable route, be it direct seaborne sales or opaque third‑party refining and re‑export schemes. For Türkiye’s refiners, the choice is simple: pivot now to non‑Russian supplies, or confront the full weight of Europe’s enforcement machinery.