Research suggests that despite sanctions related to the conflict in Ukraine, millions of barrels of fuel derived from Russian oil continue to be imported into the UK through a legal “loophole.”
This involves the refining of Russian crude in countries like India, with the resulting products then sold to the UK.
While not illegal, critics argue that this circumvents the UK’s ban on Russian oil, undermining sanctions intended to limit Russia’s war funds.
The UK government denies any Russian oil imports since 2022.
Two reports indicate that refining rules enable products made from Russian crude to enter the UK.
The Centre for Research on Energy and Clean Air (CREA) notes the proliferation of this “refining loophole,” allowing countries like India and China to legally import Russian crude and export refined products to the UK.
Global Witness estimates that around 5.2 million barrels of refined petroleum products from Russian crude were imported into the UK throughout 2023.
Most of the fuel was jet fuel, potentially used in one in 20 UK flights.
The reports suggest that this loophole indirectly provided the Kremlin with over £100 million in tax revenues.
The primary sources of imports were identified as Indian oil refineries, with the situation raising concerns about the UK’s complicity in the sale of Russian oil.
The figures also indicate that the refining loophole contributed to over £500 million worth of oil products imported by the UK during the first 12 months of the Russian oil ban.
The UK government emphasizes adherence to internationally recognized “rules of origin,” considering refined crude as originating from the refining country for trade purposes.
While the UK asserts no violation of Russian oil imports, the research points to challenges in analyzing such trade and calls for potential measures to close the refining loophole.
Ukrainian President Zelensky’s economic adviser advocates for stricter sanctions, including a complete ban on refined oil products from Russian crude.
US lawmakers have also proposed similar measures to address this issue.
The complexity arises from Russia’s key role in the global market, and while the refining loophole undermines sanctions, outright eradication of Russian supply could spike global prices, according to analysts.
