Weekly economic review (May 5-9)

SOCAR Trading provides Azerbaijan with additional revenues worth $ 1.1 bln

SOCAR Trading's activity (SOCAR's trading division) in 2008-2013 provided Azerbaijan with additional revenues worth $1.1 billion, according to the specialists of Wood Mackenzie international consulting company.

The company prepared a report on a six-year price dynamics of Azeri Light on the world market upon SOCAR Trading's order.

The report said that additional profit was obtained by increasing the cost of Azerbaijan's Azeri Light and due to SOCAR Trading's effective activity.

The cost of Azerbaijani Azeri Light oil increased by an average of $1.75 per barrel compared to North Sea Brent crude oil for the past six years, according to the report.

Some $0.6 per barrel fell to the external factors, $1.15 per barrel - to the factors associated with SOCAR Trading's effective activity in the structure of increasing the cost of Azeri Light compared to Brent, according to Wood Mackenzie.

"Accordingly, if one takes into account that the sales volume of exported oil hit 961 million barrels during the mentioned period, the total amount of Azerbaijan's additional income is directly connected with the company's activity, amounting to $1.1 billion," the experts of the company said.

At the same time, SOCAR Trading sold 72 million barrels of transit oil, transported via the Baku-Tbilisi-Ceyhan (BTC) pipeline during this period. As a result, BTC Co. consortium received $350 million of additional income.

Azerbaijani oil has significantly strengthened its market position in the Asian region due to SOCAR Trading's effective activity, according to Wood Mackenzie experts.

They said that the fact that foreign refiners preferred quality raw materials, was one of the external factors that positively influenced the growth of Azeri Light premium compared to Brent.

'While processing quality raw materials, large volumes of middle distillate fractions are obtained. As a result, the demand for it increased," said the report.

Furthermore, the Libyan crisis, which increased the global demand for crude oil was highlighted among the most important external factors.

Moreover, Wood Mackenzie experts emphasize the internal factors that increased Azeri Light prices. The security of supplies increased by SOCAR Trading and the transition to direct oil supplies without mediators, was named the most important factor.

The report of Wood Mackenzie said that in general, along with other factors, the activities of SOCAR Trading played a key role in the cost increase of Azeri Light over Brent. The document notes that internal factors (factors related to the efficient operation of SOCAR Trading) accounts for $1.15 (about two thirds) above the achieved growth at $1.75 per barrel, while the value increase of Azeri Light equates to 0.16 $.

Accordingly, most part of the premium growth is a result of effective marketing activities by SOCAR Trading, as well as effective development policy of deliveries to Asian markets, which in turn led to an increase in demand for Azeri Light, the report said.

The document prepared by the consulting company also demonstrated Brent's price dynamics in recent years, indicating the main factors that affect the price. Among the most notable changes - a sharp decline in 2008 due to the global financial crisis from $130 to $40 per barrel.

Despite the fact that, the financial crisis has weakened significantly in the next few years, the price of oil has not been able to reach the peak of 2008 and slightly exceeded $120 in 2012.

Then, the price of Brent varied in the range of $100-$110 per barrel.

In accordance with the Wood Mackenzie estimates, Azeri Light, the price of which is tied to the price quotations of Brent, also demonstrated volatility in this period. Despite this, considering the above mentioned internal and external factors, premium growth was achieved on average $1.75 per barrel relative to the price of the Brent brand.

SOCAR Trading, a subsidiary of SOCAR headquartered in Geneva was established under co-sponsorship of Anar Aliyev and Valeria Golovushkin.

Aliyev is a big-time businessman, well-known in the oil industry, and Valery Golovushkin is the founder of Lukoil Trading in Geneva.

SOCAR Trading Company started its activity in 2008.

The company sells most of SOCAR oil exported from Ceyhan (Mediterranean, Turkey), carries out trading crude oil and petroleum products from other countries, as well as assisting the parent company with international investments.

Activity of SOCAR Trading covers Europe, Asia and America. The company has offices in US, Turkey, UAE, Egypt, Singapore and other countries.

Turkmenistan's Dashoguz region growing foreign potatoes
Turkmenistan's Dashoguz region growing foreign potatoes
Turkmenistan’s Turkmenhimiya opens tender to buy various equipment, spare vehicle parts
Turkmenistan’s Turkmenhimiya opens tender to buy various equipment, spare vehicle parts
Turkmenistan’s Dashoguz region completing preparations for wheat harvesting
Turkmenistan’s Dashoguz region completing preparations for wheat harvesting
Loading Bars
Latest
WHO especially worried about Central and South America
No damage or victims reported after 6.9-magnitude earthquake in Chile
Car drives onto sidewalk cafe in southern Netherlands, injuring six
Oman reports 738 new COVID-19 cases, 13,538 in total
Oil moves higher, hovers below $40 as doubts emerge over next step on OPEC cuts
Earthquake jolts Indonesia's Bali, no tsunami alert issued
Azerbaijani president attends ceremony to launch newly renovated “Aghjabadi-2” power substation (PHOTO/VIDEO)
Kazakhstan increases import of chemicals from Turkey
Azerbaijani president inaugurates grain processing plant in Aghjabadi (PHOTO/VIDEO)
Azerbaijani president arrives in Aghjabadi district for visit (PHOTO/VIDEO)
Spain reports first new COVID-19 death since Sunday
Azerbaijani Cabinet of Ministers: Borders remain closed due to current situation
EIB funds construction project in Georgia
TABIB: If people abide by quarantine regime rules, restrictions not to be further introduced in Azerbaijan
Georgia prepares for peach and nectarine harvesting season
Azerbaijani PM to reveal details related to restrictions
Volume of deposits in national currency greatly increases in Azerbaijan
Activity of Facebook users in Azerbaijan keeps growing
Operational Headquarters: Going outside may be banned in some Azerbaijani cities
TABIB: Shopping malls planned to be fully closed on weekend in Azerbaijan
Azerbaijan names economy sector with biggest share of credit investments
Kazakhstan to up its gross agricultural output before year-end
Azerbaijani Cabinet of Ministers:Tightening quarantine regime rules under discussion
Ministry of transport eyes transferring airports of Uzbekistan to foreign investors
Timeframe for orbiting Turkish satellites Turksat 5A, Turksat 6A announced
Azerbaijan discloses data on collection of premiums in insurance market in April 2020
Bank of Georgia launches campaign to support farmers
Iran aims to boost export of mineral products
Azerbaijan confirms 325 new COVID-19 cases
Azerbaijani Azexport portal notes growing export orders after softening quarantine regime
Azerbaijan State Tax Service talks concessions made to taxpayers
Azexport portal talks availability of Facebook Shop in Azerbaijan
Azerbaijani president attends ceremony to launch drinking water supply and sewerage systems in Aghjabadi (PHOTO/VIDEO)
Azerbaijani president inaugurates “ASAN xidmet” center in Aghjabadi (PHOTO/VIDEO)
Azerbaijani president attends ceremony to start grain harvest in Aghjabadi (PHOTO/VIDEO)
Export of carpets from Turkey abroad drops two-fold in May 2020
Association of Uzbek textile manufacturers talks about progress of industry
Travel by railway remains suspended in Georgia
Ambassadors of EU member states interested in reopening tourism sector in Georgia
Turkey's export of defense products from January through May 2020 declines
Magnitude 6.8 earthquake hits northern Chile, copper mines say unaffected
France says latest U.S. trade threats over digital tax a 'contradiction'
SOCAR subsidiary starts producing raw material for medical masks fabric
Azercell introduces new “Mobile TV” service for kids
Trump administration set to bar Chinese passenger carriers from flying to U.S.
Investments help Kazakhstan raise agriculture goods processing
Turkmenistan's Dashoguz region growing foreign potatoes
Italy may use new Kazakhstan-tested platform to track quarantine compliance
Azerbaijani president visits military unit in Aghdam (PHOTO/VIDEO)
Baku Stock Exchange pays interest on bonds of Azerbaijan Mortgage and Credit Guarantee Fund
Georgia, Estonia discuss cooperation in field of transportation, tourism
Agriculture sector digitalization leads to significant money savings in Kazakhstan
Turkey's export of cars abroad from January through May 2020 slips
Airlines cut fares to help boost May traffic
Export of Turkey's export of ready-made clothes down compared to 2019
Georgia expects average cherry crop
Netherlands, Azerbaijan could create train connection
Azerbaijan developing new alternative energy project
Saudi, Russia reach deal on oil cuts, raising pressure for compliance
Uzbek textile products in great demand on French market
German bans digital doppelganger passport photos
Textile industry of Uzbekistan - fastest growing sector of country's economy
Quarantine regime to be strengthened in Kazakhstan’s Almaty city
Azerbaijani enterprise starts exporting canned goods to US
EU implements new projects to support vulnerable groups in Georgia
Payments of insurance claims by four Azerbaijani insurers decline
Export of Turkey's leather products to int'l markets down
Azerbaijani Azexport portal talks Facebook Shops integration
Kazakhstan's Samruk-Kazyna decreases its share in Kazatomprom
ADB continues to support Azerbaijan’s efforts to diversify its energy mix
Turkmenistan’s Turkmenhimiya opens tender to buy various equipment, spare vehicle parts
Turkey's export of wood, furniture abroad from January through May 2020 plummets
Coronavirus negatively affects almost all sectors of Georgian economy
Kazakhstan records decrease in money transfer volume
Oil, gas exploration work to be held throughout Turkey
Uzbek-Korean JV opens tender for procurement of pump repair kit
Hajj pilgrimage from Azerbaijan may not take place this year
Azerbaijan's Agricultural Insurance Fund talks managing company branding
Azerbaijan's pomegranate association aims to increase export volumes
BoE says advising banks to prepare for possible no-deal Brexit
16 insurance companies increase payment of insurance claims in Azerbaijan
Belgium to open bars and restaurants but not nightclubs
Azerbaijani president attends inauguration of Tartar branch of “Azerkhalcha” OJSC (PHOTO/VIDEO)
GNERC: Over 20% of business entities provided with internet services in Georgia
Cargo transshipment through Turkey's Antalya port disclosed
Turkey's export of grain, legumes to int'l markets marginally up
Exhibition of historical Baku photos opens on Baku boulevard (PHOTO)
Azerbaijani pomegranate association reveals new export targets
Turkey's export to D-8 countries down from Jan. through Apr. 2020
Turkmenistan’s Dashoguz region completing preparations for wheat harvesting
Sumgait Technologies Park talks export of aluminum to Central Asia
Cargo transshipment from Greece via Turkish ports disclosed
State share of Kafolat Insurance Company sold in Uzbekistan
Azerbaijan's Central Bank talks problematic insurance companies
Uzbek Ipak Yuli Bank, EBRD increasing their support to entrepreneurs of Uzbekistan
Uzbek-Korean JV buys sockets, switches via tender
Bank loans on rise in Azerbaijan
Turkey, US trade turnover suffers drop in April 2020
Azerbaijani president opens newly renovated highway (PHOTO/VIDEO)
Turkmenistan evaluates new varieties of cotton
All news