Bulgaria’s Complicated Relationship with Russia amid the Ukraine War

March 24, 2023 Topic: Bulgaria Region: Black Sea Tags: BulgariaUkraine WarEURussiaRumen Radev

Bulgaria’s Complicated Relationship with Russia amid the Ukraine War

A failure to comprehend the political dynamics in the Black Sea coastal states gives Moscow an opportunity to exert influence on the broader European project.

The recent invasion of Ukraine by Russia has brought to light the significance of the Black Sea region for maintaining a balance of power in Europe. However, failure to comprehend the political dynamics in the region's coastal states gives Moscow an opportunity to exert influence on the broader European project. This fact will be demonstrated in several weeks when Bulgarian citizens go to the polls to elect a new government on April 2.

The country’s president, Rumen Radev, broke with EU expectations on March 21 when he stated that Sofia would refuse to supply Kyiv with arms until after its upcoming elections, allowing citizens “to decide on behalf of Bulgaria whether they will be part of the efforts to restore peace or prolong the war”—the obvious implication being that Western arms shipments to Ukraine are standing in the way of negotiating a peace settlement to the conflict.

This is a reiteration of Radev’s statements that world leaders were needlessly prolonging the war, and that Bulgaria would also veto any proposed European sanctions on Russian nuclear fuel. Barely a week later, multiple Bulgarian politicians were sanctioned by the Global Magnitsky program, the British government, and the U.S. Treasury’s Office of Foreign Assets Control, due to corruption charges related to their involvement with Russia.

These developments coincide with the economic impact of the new tranche of Russian sanctions imposed on February 5. Additional price caps on refined fuel products such as diesel and gas oil joined December’s initial $60 cap on seaborne shipments of Russian crude. The effect has been to chip away at Moscow’s record-high account surplus of $227.4 billion in 2022. This past January posted a surplus of only $8 billion, a 58.2 percent drop from January of the previous year. With revenues decreasing and domestic expenditures continuing to creep up as the war effort intensifies, Russia’s federal budget deficit has subsequently ballooned to 1.8 trillion rubles ($24.2 billion). That is already 60 percent of the total year plan for 2023, according to the Russian Ministry of Finance.

Moscow may need to begin selling off even greater amounts of foreign currency reserves, particularly the Chinese yuan. It will also continue to expand its trade with alternative export destinations. Some sources such as the International Energy Agency are doubtful of Moscow’s ability to find other countries to accept its crude, although others predict that Russia will regain its position as the world’s top oil exporter relatively quickly.

China and India have significantly increased their imports of Russian oil. On top of this, only a relatively small percentage of countries have followed the West’s lead in imposing sanctions. According to the Economist Intelligence Unit, Moscow has actually increased its support among countries of the world. The number who lean towards Russia has increased from twenty-nine to thirty-five over the past year, while those actively condemning it have decreased from 131 to 122. 63.8 percent of the global population now lives in a country that is classified as either neutral, “Russia-leaning,” or “supportive of Russia.”

Still, those countries in active condemnation of Moscow compose 60.1 percent of global GDP. Moscow’s prospects for increasing revenue flows may lie increasingly away from the West, but there is yet another energy trading partner that makes up a significant portion of its exports—and this one, right inside of the European Union.

In 2022, Bulgaria processed over 7 million tons of Russian crude at its Lukoil refinery in the Black Sea coastal city of Burgas. It has now edged out Turkey as the third largest importer of Moscow’s oil behind China and India. Unlike other export destinations in Europe, the Lukoil refinery was able to continue importing seaborne shipments of Russian crude—the only destination in the EU granted such a privilege—after Sofia secured an exemption from the European Commission in June 2022.

However, even this capability was further qualified by the February 5 sanctions. Now, refined petroleum products can no longer be exported to any other destination besides Ukraine. Lawmakers in Sofia, aware of this fact, subsequently issued a decree in January that the refinery can be put under the operational control of the Bulgarian government for up to one year in case of “threats to national security or to the supply of critical resources.” According to Reuters, such a precaution is “aimed at protecting critical infrastructure and ensuring fuel supplies for the Balkan country.”

The intention is to insulate Bulgaria from the potential predatory economic behavior of Russia and its utilization of energy exports as a geopolitical tool to exert pressure on the EU. In April of last year, gas supplies to Bulgaria were entirely halted due to Sofia’s refusal to pay in rubles. Bulgaria’s move is not unprecedented, as Germany also took over control of multiple Russian-owned oil refineries located on its territory as an energy security precaution. The exemption granted to Bulgaria by the EU Commission is meant to act as a ballast to counter the relatively pro-Moscow tilt of the southeastern European country, which shares important historical ties with Russia in addition to its being almost entirely reliant on its energy exports.

Moscow has previously picked at this scab. The demand for payment in rubles and the subsequent halt in gas supplies mentioned above were meant to place pressure on the government of pro-European Bulgarian prime minister Kiril Petkov. The Kremlin’s strategic move was successful, contributing to the dissolution of the Petkov government and its reformist coalition in August of 2022. Snap elections the following October resulted in multiple Eurosceptic parties gaining seats in the Bulgarian parliament. This included Russia-friendly parties of not only the right, such as the “Revival” party and “Bulgaria Rise,” but also leftwing Eurosceptic parties such as the Bulgarian Socialist Party.

New general elections are set to be held on April 2. In early February, a poll by the Sofia-based Exacta Research Group predicted that the center-right party “GERB” is likely to come out on top. GERB is relatively pro-EU, but if the polls are accurate it will need to secure alliances with the Eurosceptic parties in order to form a governing coalition. Radev (the president) is already criticized by the international press for his pro-Moscow sympathies, and has previously called those in the Bulgarian parliament pushing for arms shipments to Ukraine “war-mongers.” He is vocally opposed to further arms shipments to Ukraine. A future halt in energy supplies to Bulgaria would almost certainly have the effect of strengthening the position of Eurosceptic parties.

Ultimately, Bulgaria is a microcosm of broader European views regarding the conflict and its impact. It is impossible to know how much longer the Russo-Ukraine War will last, or what its final outcome will be. But the longer it is prolonged, and the greater the escalation, the more likely it is that previously brushed-over fissures in the European project may begin to deepen.

Dominick Sansone is a PhD student at the Hillsdale College Van Andel Graduate School of Statesmanship. Previously a Fulbright recipient to Bulgaria, his writing on politics in the Black Sea region has been published by the National Interest, the Euromaidan Press, The American Conservative, and RealClear Defense, among other publications. He also previously wrote as a contributing columnist focusing on Russia-China relations at The Epoch Times.

Image: Shutterstock.