Georgia's Only Refinery Ditches Russian Crude Oil

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

Georgia's only refinery, Kulevi, has pledged that it will stop using Russian crude oil to avoid European Union (EU) sanctions.

The only commercial refinery in Georgia, Kulevi Refinery, has announced that it will replace Russian crude oil for refining by next month to avoid sanctions by the European Union (EU). 

Refinery Blacklisted

Owners Black Sea Petroleum LLC (BSP) confirmed that "implementation of its crude oil supply diversification plan is under way," a month after the company was blacklisted by the EU under its 21st sanctions package against Russia for its invasion of Ukraine in 2022. It was the first action taken against a non-Russian refinery as the EU ramps up actions against entities outside Russia that contribute to its oil revenues. BSP stated that the refinery, located in the west of the country on the Black Sea, received and processed Kazakh crude in July and will continue taking Kazakh crude during August. A Libyan cargo is due to arrive in late August and a contract, with an extension option, for continued supplies is in place until the end of 2027. With an annual capacity of 1.2 million tons, the Kulevi Refinery began operations in October 2025 using Russian crude and has plans to expand capacity to 4 million tons by 2028 to serve its domestic needs as well as exports of petroleum products. According to Industrial Info Resources data, there are 11 ongoing projects at Kulevi worth US$1.35 billion in investment. The refinery has a current capacity of 24,000 barrels per day (bpd) but is aiming for 90,000 bpd. 

The Company Take

"At a press briefing on 24 July 2026, the European Commission stated that BSP was in active communication with the Commission and explained that the six-month transition period was intended to allow the refinery to diversify away from Russian crude oil," the company stated. "The steps already taken by BSP are consistent with that objective and timeframe. BSP will continue to implement its feedstock diversification plan, engage constructively with the European Commission and other relevant authorities, and provide clear, verifiable evidence of progress."

European Sanctions

Kulevi was was brought into the spotlight last year when Reuters reported that Russian ⁠company Russneft started shipping crude to the refinery for the start of its operations in October 2025. The Centre for Research on Energy and Clean Air (CREA) think-tank showed Kulevi received six shipments of Russian crude oil between last October and May 2026, with refined products then shipped to Spain and ​Bulgaria, among other locations. BSP has been in talks with the EC and according to one senior EU official, speaking to reporters in Brussels: "We'll give them some credit, but we want to see... that they do what they promised, and then we can propose to the council to delist them." The 21st package of restrictive measures against Russia focused on Russian energy, financial services and crypto. The 236,000 bpd Mozyr Refinery in Belarus was also blacklisted. 

Key Takeaways

• Georgia's only refinery, Kulevi, has announced that it will stop using Russian crude oil to avoid European Union (EU) sanctions.
• The company has contracted loads from Kazakhstan and Libya for the coming year. 
• The Kulevi Refinery began operations last October and has a current capacity of 24,000 barrels per day (bpd), with the goal of expanding to 90,000 bpd. 

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