The dominant importer of oil to the Czech Republic is Russia, but this will change from next year

In response to its military invasion of Ukraine in February 2022, Europe imposed a number of sanctions on Russia, including the import of Russian oil. Nevertheless, the Czech Republic, together with Slovakia and Hungary, negotiated an exception so that it could continue to take Russian oil through the Družba pipeline.

The Czech Republic took full advantage of this last year, when the share of Russian oil in total imports was approximately 58 percent. In absolute terms, this represents 4.3 million tons of the total imported 7.4 million tons of oil, based on CZSO data. Compared to 2022, the share of Russian oil paradoxically increased by two percentage points.

While Russian deliveries will still dominate the total import this year, according to Mero, the owner and operator of the Czech part of the Družba pipeline and the IKL pipeline, the situation will change next year. This will happen thanks to an increase in the capacity of the Italian TAL pipeline, which is followed by the German IKL pipeline leading to the Czech Republic.

The share of Russian oil in imports to the Czech Republic rose to 58 percent last year

Economy

The expansion of the capacity of this oil pipeline, known as the TAL-PLUS project, is supposed to bring the Czech Republic roughly four million tons of extra oil per year from 2025. Thanks to this, it could definitively get rid of dependence on Russian oil delivered via Druzhba.

“Increased supplies will fully cover all domestic consumption, which is roughly 7.1 million tons of oil per year. We will no longer need Russian oil,” said Mero CEO Jaroslav Pantůček in a recent comment for Hospodářské noviny.

The question remains as to which countries and in what quantity they will replace Russian supplies. Data from recent years show that the second largest oil importer in the Czech Republic is Azerbaijan, whose share reached 26.5 percent last year, which was 3.3 percentage points more than in 2022.

The third largest supplier is Kazakhstan, which in the last two years had a tenth of the total import. On the contrary, the share of American oil is falling. While it was 12 percent in 2020 and 2021, it was only two percent last year.

“After the new capacity of the TAL pipeline is put into operation in 2025, I expect that most of the deliveries will be taken over by the countries that are already supplying oil to this pipeline – that is, primarily Azerbaijan, Kazakhstan, the USA, Iraq… But there are approximately twenty countries in total. So I don’t think that dominant Russia should be replaced by another dominant player. It will be more countries with a lower share and it will depend on the market situation,” XTB analyst Jiří Tyleček told Novinka.

Czech Foreign Minister Jan Lipavský (Pirates) drew attention to economic cooperation in the field of energy supplies with Azerbaijan on Tuesday. After a meeting with his Azerbaijani counterpart, Ceyhun Bayramov, he said that last year Azerbaijani oil covered more than a quarter of Czech consumption, while the Czech Republic was the country’s tenth most important partner for oil exports. In turn, Bayramov mentioned the possibility of greater cooperation in the supply of natural gas.