Russneft Delivers First Oil Shipment to Georgia's New Kulevi Refinery

Inaugural Shipment Marks New Economic Chapter

Russian oil company Russneft has delivered its first oil shipment to Georgia's newly constructed Kulevi oil refinery. The delivery, which took place on October 6, involved the tanker Kayseri transporting 105,340 metric tons of Siberian Light crude oil from the Russian Black Sea port of Novorossiisk to the Kulevi Oil Terminal. This event signals a notable economic exchange between Russia and Georgia, countries that have maintained no formal diplomatic relations since the 2008 conflict.

Georgia's First Full-Cycle Refinery Begins Operations

The Kulevi oil refinery, described as Georgia's first full-cycle oil refinery, commenced operations in October 2025. Operated by Black Sea Petroleum, the facility aims to reduce Georgia's reliance on imported fuel. The project, announced in 2023 with a projected cost of $700 million, broke ground in 2023 or late 2024. Its initial processing capacity is set at approximately 1.2 million tons annually, equivalent to about 24,000 barrels per day. Plans are in place to expand this capacity to 4 million tons per year by 2028, with the goal of supplying both domestic consumption and export markets.

Warming Economic Ties Amidst Geopolitical Tensions

Despite the absence of formal diplomatic relations since the 2008 war over South Ossetia and Abkhazia, economic ties between Moscow and Tbilisi have steadily deepened under the ruling Georgian Dream party. This warming of economic relations comes as Georgia's relations with Western countries have reportedly cooled.

Strategic Implications for Both Nations

For Russia, this shipment is part of a broader strategy to diversify its exports in response to Western sanctions imposed following the Ukraine conflict. The deal also emerges amidst a fuel processing crisis within Russia, exacerbated by Ukrainian drone strikes that have compelled Moscow to seek new refining options abroad. Georgia, which imported $520 million in petroleum and petroleum oils from Russia in 2024, representing around 40% of its total, views the new refinery as a step towards enhancing its energy security and reducing its dependence on fuel imports from various countries, including Russia, Turkey, Azerbaijan, Romania, and Kazakhstan.