SOCAR redeems US bank loans early, sources say

Azerbaijani oil firm SOCAR has redeemed a $1.3 billion syndicated loan led by US banks Citi and JP Morgan two years ahead of schedule, around the time the Azerbaijani firm received a loan of a similar amount from Russian oil firm Lukoil, according to three banking and trading sources familiar with the matter, Report informs, citing Reuters.

Citi, JP Morgan, and SOCAR declined to comment on the early redemption of the US bank-led loan. Lukoil and SOCAR have declined to respond to requests for comment on the Lukoil loan, which was previously reported by Reuters.

The sources said there was no suggestion that either transaction violated US or other financial sanctions against companies doing business with Russia.

Nevertheless, the sources said the early redemption had the effect of allowing Moscow to resume sales of crude to SOCAR's Star refinery in Türkiye, a major longstanding buyer, at a time when other refiners worldwide were shunning Russian oil.

Around the time of the transactions, SOCAR resumed purchases of Russian oil at Star, which it had halted last year. The sources said the halt had been at the request of the US banking consortium, which feared falling foul of sanctions following Russia's invasion of Ukraine.