“Oil Scandal: Vietnam Rejects SOCAR Supplies”

The contamination of oil in Ceyhan detected in July disrupted the schedule of shipments of Azeri Light crude to Vietnam, jeopardizing the implementation of the long-term agreement signed in May between SOCAR Trading Singapore and the Vietnamese company Binh Son Refining & Petrochemical (BSR), haqqin.az reports citing sources.

Vietnam’s BSR was supposed to receive up to 2 million barrels of Azerbaijani oil per month (almost 275 thousand tons) from July, but the deliveries were temporarily postponed until the situation with the detection of organochlorines in the Azeri Light mixture was resolved, it became known from two sources.

It was expected that such deliveries would cover half of the needs of the Dung Quat refinery with an annual processing capacity of 7 million tons of oil on the balance sheet of BSR, and the Vietnamese side is currently waiting for the situation to be resolved. This topic may become a subject of negotiations within the framework of the international conference APPEC 2025 scheduled for September 8-11 in Singapore with the participation of hundreds of companies, including BSR and SOCAR Trading Singapore.

“At the same time, this does not prevent SOCAR Trading Singapore as an authorized company from supplying other grades of oil to this Vietnamese refinery, in particular Bonny Light (Nigeria), WTI (USA) and Murban (UAE), compatible with Dung Quat processing technology. Thus, BSR avoids dependence on one supplier and adjusts processing modes as necessary,” explained haqqin.az.

Recall that in May of this year, SOCAR Trading Singapore and BSR signed the largest trade agreement with a deadline of 2035, concerning the total supply of about 35 million tons of Azerbaijani light oil to Vietnam during the contract period.

By the way, the Dung Quat refinery, which has been operating since 2009, is “sharpened” specifically for light grades of oil, since it was built for oil from the Vietnamese White Tiger field, whose reserves are rapidly depleting.

This refinery has been cooperating with Azerbaijan on oil purchases since 2010. From 2010 until the end of January 2025, it received a total of 35 batches of Azeri Light from Azerbaijan through SOCAR Trading Singapore (a branch of the SOCAR trading house) with a total volume of about 31.7 million barrels worth about 2.55 billion US dollars.

Over the past 5 years, the peak of such oil supplies was observed in 2022 – 607.6 thousand tons. In 2024, 138.5 thousand tons of Azerbaijani oil were sent to Vietnam.

“The expected start of Azerbaijani supplies this year based on the new long-term agreement signed in May will make Azerbaijani oil one of the leaders among other grades of oil purchased by Dung Quat. So far, the refinery’s favorites include oil from Kuwait, Nigeria and the United States. Thus, the first batch of American WTI oil this year, amounting to 1 million barrels, will arrive at the refinery in November 2025 (the previous purchase of American oil was in December 2024),” the source said.

At the same time, the refinery is undergoing modernization, the completion of which in 2028 will allow it to significantly increase the range of oil grades received, not limited to light oil.

Over the entire period of operation, the Dung Quat refinery has received more than 110 million tons of oil from various sources, which allowed it to produce more than 100 million tons of oil products (more than 4 million tons already this year), some of which Vietnam exports.