Energy expert Nikolay Kacharov, speaking to Bulgarian National Radio, highlighted that Bulgaria’s energy costs have risen significantly due to contractual obligations, even before considering increased gas prices caused by the conflict in the Middle East. According to Kacharov, Bulgaria’s long-term agreement with the Turkish company Botas, signed to reserve capacity for gas transport, has added about 15% to the country’s energy bill without any gas consumption. He stressed that this cost alone surpasses the current financial impact of the Middle East conflict on Bulgaria’s energy expenditures.

While Bulgaria benefits from a long-term supply contract with Azerbaijan, Kacharov warned that such agreements are not absolute guarantees. “When logistics become difficult, or quantities are redirected based on price or strategic priorities, Azerbaijan can choose to supply another country and simply pay penalties. That changes everything,” he explained. He also noted that gas prices are now largely independent of oil prices and follow regional market logic rather than logistics or crude costs. Bulgaria currently imports roughly one billion cubic meters of gas annually from Azerbaijan, representing one-third of national consumption, at a favorable price.

Further reading: Gas Deal Disaster: How Bulgaria Ended Up Paying Millions for Unused Turkish Transit

Kacharov emphasized that a 10% rise in the European TTF gas price index would increase Bulgaria’s energy bill by around 100 million euros, but Azerbaijani gas contributes the smallest portion of that figure. He recommended that Bulgaria negotiate with Azerbaijan to expand imports from Shah Deniz, calling it the best opportunity to secure sufficient gas at a competitive price.

Regarding the Middle East conflict, Kacharov admitted that initial expectations predicted a rapid resolution in just three to four days. However, oil prices have since surged above USD 100 per barrel, affecting European markets and pushing fuel costs at gas stations in Western Europe up by over 20%. In France, diesel now costs nearly 2 euros per liter. Kacharov said the rising costs are partly speculative, driven by an open market where sellers can set prices above minimum thresholds as demand currently exceeds supply.

He explained that logistical challenges, such as tankers being unable to pass through key straits affecting 20% of transport, as well as temporary reductions in refinery capacity, have created both short-term and potential long-term effects on supply. Despite these pressures, Kacharov said structural oil availability is sufficient; the primary challenge lies in pricing, not quantity.

Finally, Kacharov pointed out that although Bulgaria’s current supply is stable, fuel prices will be influenced by global trends, including disruptions in logistics from countries like Kazakhstan and Saudi Arabia. “Today we buy from the east, and those sources are affected by the war, so oil must be sourced elsewhere as well,” he noted, concluding that geopolitical developments remain the main determinant of energy market fluctuations in the near term.