Despite sanctions, the UK indirectly imports Russian crude oil worth $752 million via loophole
This loophole allows Russian crude oil to be refined in third-party countries, especially India, and then sold to the UK. The BBC noted that this practice isn't illegal and doesn't contradict the UK's ban on importing Russian oil, but it does undermine sanctions intended to limit Russian war funds.
UK government's denial
The UK government has denied importing any oil from Russia since 2022. However, a government spokesperson stated that international "rules of origin" specify that for trade purposes, crude oil is considered to originate from the country where it's refined.
Two independent reports available to the BBC suggest that these refining regulations enable importing products derived from Russian crude oil into the UK.
The "Refinery loophole"
The Center for Research on Energy and Clean Air (CREA) highlighted that this "refinery loophole" permits countries such as India and China, which have not sanctioned Russia, to import and refine Russian crude oil legally. They can then create petroleum products like jet fuel and diesel oil and export them to the UK and EU.
This loophole not only escalates the demand for Russian crude oil and allows for increased sales in terms of volume, but it also raises the price, significantly aiding the Kremlin's war chest, explained Isaac Levi, CREA's Head of European and Russian Policy and Energy Analysis, in an interview with the BBC.
Immense profits for Russia
CREA data given to the BBC indicates that petroleum products made from Russian oil, valued at approximately £569 million (around $752 million), have been imported into the UK during the year-long ban on importing Russian crude oil, starting from December 2022.
An independent report from the Global Witness group estimates that in 2023, about 5.2 million barrels of refined petroleum products produced from Russian crude oil were imported into the UK. 4.6 million barrels of this imported fuel was aviation fuel, which, according to the group's researchers, was used in one out of every 20 flights in the UK.
UK allegedly aiding sales of Russian crude oil
Lela Stanley, the Ukraine campaign team leader at Global Witness, argues that although the "UK government condemns the Ukraine war, it indirectly supports the sale of Russian crude oil by not closing this refinery loophole."
Every pound spent on Russian oil helps Putin fund his brutal war, Stanley stressed.
According to both reports, this existing loophole indirectly ensured that the Kremlin received tax revenues exceeding £100 million (around $132 million). Most of the petroleum products derived from Russian oil imported into the UK came predominantly from three Indian crude oil refineries- Jamnagar, Vadinar, and New Mangalore, and the rest from nine other refineries in various countries, including China.
Data from the International Energy Agency indicates that India's importation of Russian crude oil has risen since Russia's offensive on Ukraine. To attract new buyers, Russia has dropped oil prices in response to sanctions. The data also reveals an upswing in the UK's import of Indian-produced aviation fuel and diesel oil since the invasion.