ECONOMY
OIL EXPORT VIA BAKU-NOVOROSSIYSK TO CONTINUE AFTER COMMISSIONING OF BTC PIPELINE
After commissioning of Baku-Tbilisi-Ceyhan pipeline SOCAR and AIOC will not suspend oil export.
Increased oil export via Baku-Novorossiysk cannot be ruled out. However, the only stumbling block is that Russia imposed too high oil transportation tariffs. Last year, Baku paid $15.67 per ton to Moscow.
Oil transportation via Baku-Supsa oil pipeline is cheaper than Baku-Novorossiysk with Azerbaijan paying only $3.2 per ton. Yearly oil transportation through Baku-Supsa is estimated at 6.5 million tons.
The other loss for Azerbaijan is mixture of the high-quality Azeri oil with Russian and Kazakh crude. This mixture makes the Urals blend. The pure Azeri Light price is $4-5 higher than the Urals.
Thus, Azerbaijan pays higher tariffs and loses $4-5 while transporting via Baku-Novorossiysk pipeline. However, as the northern route is of strategic importance Azerbaijan will continue using it for a long time.