The Bulgarian government kicked off the new year by conducting a major inspection of the Russian-owned Neftohim oil refinery in Burgas, a Black Sea coastal city. The facility belongs to Moscow-based oil giant Lukoil. It is the company’s only location in the European Union (EU) and, therefore, exempt from the ban on imports of seaborne shipments of Russian crude oil.

According to the Bulgarian customs agency, the January 1 operation was conducted to inspect the refinery (and over fifty warehouses associated with the oil industry) to inventory the available quantities of imported Russian crude and all petroleum products manufactured from it. About 150 customs officers were involved in carrying out the large-scale inspection. However, the timing of the move—which Russian news sources are classifying as a raid—and the political circumstances surrounding it suggest that there is greater geopolitical relevance to Sofia’s decision than a simple matter of customs compliance.

Bulgaria was the only EU member exempt from the ban on seaborne shipments of Russian crude due to its heavy energy reliance on the product. The southeastern European country joined China, India, and Turkey as one of the top four destinations for exports of Russian oil. Even many of the most pro-European politicians in Bulgaria—such as Harvard MBA graduate and former Prime Minister Kiril Petkov—initially favored the exemption. One argument was that the Lukoil refinery sold refined fuel to Ukraine to support its war effort against Russia. Bulgaria was a major supplier of diesel gas to the former, at times reportedly covering forty percent of Kiev’s diesel needs.

There appears to be broad political agreement in Sofia regarding removing the EU dispensation. This past December saw a motion passed in the Bulgarian National Assembly to waive the exemption and indefinitely halt the import of all Russian crude. The Neftohim refinery was subsequently mandated to stop exporting any petroleum products made from the latter beginning on January 1. This will be followed by a total halt of the facility’s use of Russian oil in its refining processes starting on March 1.

Lukoil had been able to read the political tea leaves in Bulgaria for some time (lawmakers in September had already decided to push the previously planned end to the exemption forward by three months). The Russian oil giant responded to the parliamentary decision in December by decrying “discriminatory laws and other unfair, biased political decisions.” It subsequently stated that it would begin working with international consultants to review its business strategy in Bulgaria; as such, the company will likely move to sell off its major assets in the country, which include upwards of 220 gas stations, nine oil depots, and various enterprises that focus on bunkering ships and aircraft. That prospect sparked interest in several international energy investors. Most recently, on December 25, the Azerbaijani ambassador to Bulgaria stated that his country may be interested in acquiring the facility.

There are many reasons why Sofia would pick the present moment to conduct its extensive inspection operation under the auspices of inventory of the Russian oil and oil products currently on hand. For one, legal amendments in the most recent motion leave many loopholes open for Lukoil to continue raking in large amounts of money. The December mandate still allowed for the exception of producing low-octane fuel products made from Russian crude imports that were received before the first section of the new ban went into effect on January 1. Notably, seaborne shipments of Russian crude increased to around 140,000 barrels a day in previous months, thus supplying ample opportunity for Moscow to secure additional revenue before cashing out and selling off its assets. Per the EU’s hostile economic stance toward Russia, Bulgaria may seek to preempt any such scenario.

The possibility of sheer corruption can also not be discounted. Bulgaria is the poorest country in the EU, and per its heavy energy reliance on Moscow, it needed to ensure steady flows of affordable Russian crude. There has been subsequent speculation that members of parliament from across the political spectrum were conspiring to make the refinery as unprofitable as possible, taking advantage of Moscow’s poor image in Europe and thus justifying its stringent policies with the fact that they were aimed at harming a subsidiary of the Russian government. For instance, a tax on profits placed on the Lukoil refinery currently stands at 60 percent and is set to drop to 15 percent once it leaves Russian hands. In this hypothesis, such a move was intended to force the sale of Lukoil’s assets to either a Bulgarian national—who would then ostensibly provide kickbacks to the politicians responsible for making the scenario possible—or to legitimate the direct government seizure of those assets (with its own obvious corruption implications).

However, it could also be possible that the EU is simply putting the screws into Bulgaria to accelerate the process of weaning the country off Russian energy. As the prospects for a definitive Ukrainian victory look increasingly bleak, Brussels may be attempting to do all it can to exacerbate economic harm on Russia to increase leverage in any potential negotiating process—or, perhaps, even as an expression of its commitment to continue the ostracization of Moscow indefinitely, regardless of any outcome on the battlefield. As mentioned, Bulgaria is a top-four export destination of Russian crude, and a complete halt in the latter would likely force some reevaluations of Moscow’s strategy for its oil industry (at least in the short term).

Regarding the timing of the surprise inspection, Sofia could thus be interested in ensuring that Lukoil does not have the opportunity to negatively affect the operational capacity of the facility moving forward before its imminent departure. The customs inspection took place almost exactly one year after Bulgarian lawmakers issued a decree that the Neftohim refinery could be put under the direct control of the government in case of “threats to national security or to the supply of critical resources.” Germany did exactly this earlier in the war, taking control of multiple Russian-owned oil refineries located on its territory back in 2022. While it is not necessarily the case that Sofia is preparing to seize the Neftohim refinery, the inventory operation could have been part of broader energy security precautions to ensure the facility remains functional between Lukoil’s withdrawal and the subsequent takeover by whoever ends up in possession of its assets.

This is a critical strategic imperative for Sofia. Neftohim provides around 80 percent of Bulgaria’s diesel and gasoline, and its operations account for a tenth of the country’s GDP. Before 2022, Bulgaria was also entirely reliant on Russia for its natural gas needs. Sofia’s refusal to pay for the product in rubles led to Moscow halting its exports to the country. Energy has proven to be a critical factor in Russia’s geopolitical strategy regarding the EU. While the war in Ukraine has facilitated greater integration among the member-states in some ways, it has also exposed weaknesses in others.

The commitment to the anti-Russia stance of Brussels and Berlin has often come at the price of domestic national interests. While many European populations have been willing to deal with higher energy prices to support Ukraine, Bulgaria’s relatively pro-Russian populace sets it apart from most other EU states. That is not to say that many of the country’s politicians are unwilling to make the necessary sacrifices to target Moscow. Delyan Dobrev, the energy committee chair in Bulgaria’s parliament, has been leading the charge against Lukoil. Dobrev—who completed his undergraduate degree in economics at Wesleyan University—has been against the exemption on seaborne shipments of Russian crude, telling Politico that Lukoil’s profits have helped to “finance Putin’s regime.”

Since the war’s outset, Bulgaria’s policies have attempted to balance the EU’s hostile stance towards Russia and the country’s energy needs. But it seems that the former is taking priority. The apparent expectation is that European leadership will assist Sofia with transitioning from its energy reliance on Moscow. As Bulgaria navigates between the dueling geopolitical foes, it has attempted to reduce its oil and natural gas reliance on Russia to secure its own position while facilitating greater EU integration. However, it remains to be seen whether this strategy can be maintained indefinitely without significant public pushback, as the Bulgarian people increasingly bear the price of adhering to the EU diktats. Frustration from the economic and political relationship with Brussels contributes to the country’s already tense political scene. Over the past several years, opposition parties have made steady gains in parliamentary elections.

The greatest example of this is the Russia-friendly, Euroskeptic “Revival” party. Arriving on the political scene in 2021, the group secured thirteen seats in the Bulgarian National Assembly. It subsequently gained an additional fourteen in the 2022 snap election—notably, almost eight months after the beginning of the war in Ukraine. Most recently, in the April 2023 parliamentary elections, Revival picked up ten more seats, bringing its total to thirty-seven MPs and landing it in second place behind the more center-right Citizens for European Development of Bulgaria (GERB) for most seats held by any single party.