Sunday June 16 2024

Azerbaijan emerges as Italy's top oil supplier [ANALYSIS]

20 May 2024 12:56 (UTC+04:00)
Azerbaijan emerges as Italy's top oil supplier [ANALYSIS]
Ulviyya Shahin
Ulviyya Shahin
Read more

Italy imported $1,537,616,000 worth of oil from Azerbaijan during the months of January to April of this year, Azernews reports, citing the State Customs Committee.

This figure represents a decrease of $570,495,000, or 27.1%, compared to the same period in 2023.

During the reporting period, Italy's oil imports decreased by 28.6% annually to reach 2,400,000 tons.

It should be noted that during this period, Italy was the main destination for Azerbaijan's crude oil exports. The value of trade turnover between the two countries during the reporting months amounted to $3,042,000,000.

Azerbaijan, located at the crossroads of Europe and Asia, is known for its substantial oil and gas reserves, making it a significant player in the global energy market. The country's oil industry dates back over a century, with the discovery of the world's first commercially viable oil well in the late 19th century in Baku, the capital city.

Since gaining independence from the Soviet Union in 1991, Azerbaijan has focused on developing its oil and gas sector to drive economic growth and diversification. The development of the Azeri-Chirag-Gunashli (ACG) oil field in the Caspian Sea and the construction of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline and the South Caucasus Pipeline (SCP) have significantly boosted Azerbaijan's oil export capabilities.

Italy, on the other hand, is one of the largest economies in Europe and is heavily reliant on energy imports to meet its domestic demand. As a member of the European Union (EU), Italy's energy policy is influenced by EU directives aimed at promoting energy security, sustainability, and competitiveness.

The trade relationship between Azerbaijan and Italy, particularly in the oil sector, has strengthened over the years. Italy is among the major importers of Azerbaijani oil, relying on it to meet its energy needs and diversify its energy sources. This bilateral trade relationship has been facilitated by the construction of pipelines and the establishment of trade agreements between the two countries.

The State Customs Committee of Azerbaijan regularly publishes data on the country's trade activities, including exports of oil and other commodities to various destinations, providing valuable insights into the dynamics of Azerbaijan's international trade relations.

Against this backdrop, the recent news of Azerbaijan exporting $1.5 billion worth of oil to Italy underscores the significance of their economic ties and the role of the oil sector in driving bilateral trade and cooperation.

In 2023, Azerbaijan emerged as Italy's primary oil provider, as per a report by Azernews citing the Italian Ministry of Environment and Energy Security. It's projected that Azerbaijan will supply approximately 11.3 million tons of oil to Italy this year, marking a 25% increase from 2022.

Notably, Azerbaijan maintained its lead as Italy's top oil supplier based on results from January to July 2023, dispatching a total of 6.458 million tons. This included 4.404 million tons of Azeri Light and 2.054 million tons of Azeri Blend. The volume of oil exports surpassed the previous year by 12.8%, as indicated by data from the Italian Ministry of Environment and Energy Security.

During the first seven months of 2023, oil shipments to Italy experienced a slight decline of 4.7%, amounting to 34.281 million tons. Following Azerbaijan, the top five oil suppliers were Libya (5.748 million tons), Iraq (4.386 million tons), Kazakhstan (3.905 million tons), and the USA (3.765 million tons).

In July 2023, Azerbaijani oil shipments to Italy saw a notable increase of 39.1% year-on-year, reaching 1.113 million tons, including 519,000 tons of Azeri Light and 594,000 tons of Azeri Blend. Libya exported 1.207 million tons, the USA 975,000 tons, Kazakhstan 327,000 tons, and Saudi Arabia 322,000 tons. Italy's overall oil imports in July decreased by 17.5% compared to the same period in 2022, totaling 4.954 million tons.

Furthermore, Azerbaijan attained the status of Italy's primary oil supplier in March 2023, as reported by Italy's Ministry of Environmental Transition. In January, Azerbaijan ranked as the second-largest supplier, followed by third place in February.

March 2023 witnessed a notable surge of 21.6% in oil imports to Italy compared to the corresponding period in 2022, amounting to 5.416 million tons, as stated by the Ministry. The top five oil suppliers to Italy during this period were Azerbaijan (973,000 tons, including 617,000 tons of Azeri Light and 357,000 tons of Azeri Blend), Iraq (738,000 tons), Saudi Arabia (718,000 tons), Kazakhstan (504,000 tons), and Libya (489,000 tons).

Azerbaijan's oil supplies to Italy in March 2023 increased by 40.4% year-on-year, while in Q1 of the same year, they decreased by 18.7% year-on-year, totaling 2.183 million tons.

In March, Azeri Light oil was purchased at $86.21 per barrel, marking a 30% decrease compared to the previous year, while Azeri Blend was priced at $84.27 per barrel, down by 29% year-on-year. Kazakh CPC Blend and KEBCO were priced at $83.04 per barrel and $83.74 per barrel, respectively.

The average imported oil price for Italy in March 2023 stood at $82.54 per barrel, significantly lower than the $115.7 recorded in March 2022. Escravos was the most expensive variety at $99.38 per barrel, while Bravo was the cheapest at $70.29 per barrel.


Follow us on Twitter @AzerNewsAz

Latest See more