Russian oil getting into UK via refinery loophole, reports claim – BBC.com

Millions of barrels of fuel made from Russian oil are still being imported to the UK despite sanctions imposed over the war in Ukraine, research claims.
A so-called "loophole" means Russian crude is refined in countries such as India and the products sold to the UK.
This is not illegal and does not breach the UK's Russian oil ban, but critics say it undermines sanctions aimed at restricting Russia's war funds.
The UK government denied there had been any imports of Russian oil since 2022.
But a spokesman said internationally recognised "rules of origin" define that crude, once refined in another country, is classed for the purposes of trade as originating from the refining country.
The UK is among many Western countries to ban the import of all oil and oil products that originate in Russia in a bid to hit the amount of cash Moscow can generate from fossil fuels.
But two separate reports, shared exclusively with the BBC, suggest the rules on refining enable products made from Russian crude oil to arrive on UK soil.
The Centre for Research on Energy and Clean Air (CREA) said this "refining loophole" meant countries such as India and China, who have not sanctioned the Kremlin, are able to legally import Russian crude and refine it into oil products such as jet fuel and diesel.
They then export those products to the likes of the UK and the EU.
"The issue with this loophole is that it increases the demand for Russian crude and enables higher sales in terms of volume and pushing up their price as well, which increases the funds sent to the Kremlin's war chest," said Isaac Levi, head of CREA's Europe-Russia policy and energy analysis.
In a separate research paper, campaign group Global Witness estimated that throughout 2023, some 5.2 million barrels of refined petroleum products that had been produced from Russian crude oil were imported to the UK.
Most of the fuel imported – 4.6 million barrels – was jet fuel, which the group's researchers suggested was used in one in 20 UK flights.
Lela Stanley, campaign lead for the Ukraine team at Global Witness, said while "the UK government falls over itself to decry the war in Ukraine, it remains complicit in the sale of Russian oil by keeping this refining loophole open".
"Every single pound spent on Russian oil helps Putin pay for his brutal war," she added.
The exclusive figures shared with the BBC from CREA estimated that during the first 12 months of the Russian oil ban from December 2022, some £569m worth of oil products imported by the UK were derived from Russian crude.
Both reports claimed the so-called loophole indirectly provided the Kremlin with more than £100m in tax revenues.
They also said the bulk of the imports came mainly from three oil refineries in India – Jamnagar, Vadinar and New Mangalore, along with nine others in several countries including China.
Most of the estimates made by CREA and Global Witness were based on analysis of oil shipment figures from data and analytics firm Kpler, with pricing data based on Eurostat along with some other data sources.
Both CREA and Global Witness said the two research papers were based on assumptions and admitted there were challenges and limitations around analysing such trade.
Figures from the International Energy Agency show that Indian imports of Russian crude have increased since the war in Ukraine began. In response to sanctions, Russia dropped its oil prices to attract new buyers.
Since the invasion, UK imports of Indian jet fuel and diesel have also risen.
Russia is the world's third largest oil producer. It extracts crude oil from the earth, which is then exported to refineries and turned into products such as petrol, diesel, jet fuel and various plastics.
The Russian economy is highly dependent on such exports.
Western allies have hit Russia with numerous sanctions including an oil price cap, which aims to prevent Moscow getting more than $60 for a barrel of crude oil.
But there are questions over whether the measures are as harsh as hoped after the International Monetary Fund recently upgraded its forecast for Russia's economic growth in 2024 from 1.1% to 2.6%.
The sanctions have also had an impact on the countries imposing them, with prices for both oil and gas soaring as nations, mainly those in the EU, scrambled for new supplies away from Russia.
In January last year, trade statistics suggested the UK had imported no fossil fuels from the country, whereas in 2021 imports of gas, oil and coal from Russia to the UK were worth a combined £4.5bn.
A UK government spokesman said since sanctions had come into effect, there had been "no import of Russian oil and oil products into the UK".
He said in addition to "providing proof that goods are not of Russian origin, importers must now include the country of last despatch to ensure oil from Russia is not being diverted through other countries".
Brian Mulier, co-head of the international trade and customs group at law firm Bird & Bird, said rules of origin ultimately meant that Russian crude oil refined in a country such as India would be classed as Indian oil.
"A change in origin is determined based on substantial processing," he said. "Once Russian refined oil products are substantially processed off the water in a jurisdiction other than the Russian Federation, they are no longer considered to originate in the Russian Federation."
An oil industry source added that as the UK is not self-sufficient in diesel it has to buy it from somewhere, and if it doesn't get it from India it risks paying a higher price elsewhere, and passing the cost on to the consumer.
But Oleg Ustenko, economic adviser to Ukrainian President Volodymyr Zelensky, called on Western allies of Ukraine to toughen up the current sanctions to include a full ban on all refined oil products derived from Russian crude.
"We have to do everything possible to cut off finance to Russia. We have to make sure they do not have enough cash in their hands to continue this bloody war against us," he said.
"It should be done in these countries who are… really our allies. Starting in the UK, EU and US. It's not difficult for the UK to introduce that kind of ban."
CREA's Mr Levi agreed that such a move would close the refining loophole.
Matt Smith, an analyst at Kpler which is the source of much of the research, said while it is impossible to separate which refined oil products are produced from Russian material, "it is fair to say at least some of the refined products going into Europe are produced from Russian material".
The UK was therefore receiving oil products from India that were "likely to have been refined from Russian crude", he said.
Mr Smith said while the so-called loophole was undermining sanctions, the situation was complex.
"It is impossible to extricate Russian crude or products created from Russian material from the global market," he said. "Russia is also such a key player that the powers that be don't want to completely eradicate Russian supply from the global market because it would cause prices to spike."
Last year, some US lawmakers also pushed for a ban on fuel imports from refineries that use Russian crude oil, with US representatives Lloyd Doggett and Joe Wilson introducing a bill to close the refining loophole.
All three Indian oil refineries did not respond to the BBC's requests for comment.
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