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31 Aug, 2023 15:38

Russian oil products pouring into EU – Politico

Top Ukrainian economic adviser has called on the West to close the sanctions ‘loophole’
Russian oil products pouring into EU – Politico

The Ukrainian president’s top economic adviser has urged Western countries to tighten anti-Russia penalties, arguing that the current restrictions allow third countries like India, China and Türkiye, to refine crude exported by Moscow and re-sell it without restrictions.

In an interview with Politico on Wednesday, Oleg Ustenko appealed to officials in the EU, the UK and the US to close the “loophole” used for evading sanctions imposed on Moscow over the conflict in Ukraine. 

According to Ukrainian President Vladimir Zelensky’s aide, Russia’s state energy firms are still able to ship crude oil to nations that have not signed up to Western sanctions. The oil is then refined into petrol, diesel, kerosene and other fuels before being sold on global markets. 

A price cap on Russian seaborne oil exports of $60 per barrel, introduced by the EU and G7 countries, was supposed to prevent this from happening. However, in response Russia stopped shipments to countries that enforce the mechanism, and turned to Asian markets.

Ustenko noted that India, the world’s third-largest importer and consumer of crude, has ramped up oil purchases from Russia over the past year. 

Prior to the military conflict, “they were buying Russian oil but the level of their imports was very marginal, only around 1% of their imported oil,” he said. “Now it’s on the level of almost 40%, which is a really dramatic change.”

Earlier this week, Oil Minister Hardeep Singh Puri said India would continue to purchase crude oil from any source that can offer shipments at the lowest price. 

According to the Ukrainian presidential aide, Kiev would like to build support among G7 nations to bring the price cap down to just $30 per barrel. 

Last year, Poland and the Baltic countries pushed for a lower price ceiling, but other EU members blocked the proposal.

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