UK eases Russian oil sanctions

The British government changed its new Russian oil sanctions this week by carving out diesel and jet fuel refined in third countries from the import ban that took effect on May 20. The exemption was set out in General Trade Licence GBSAN0004, published by the Department for Business and Trade on May 19, alongside regulations banning oil products processed outside Russia from Russian crude. The move drew criticism from Brussels on Thursday after EU officials said it had not been raised during a G7 finance ministers’ meeting in Paris earlier this week. UK ministers said the licences were intended to protect British consumers and businesses from energy-market instability linked to the Middle East conflict. ### What exactly did the UK change? The Department for Business and Trade said on May 19 that its new general trade licence permits the import into the UK of diesel and jet fuel made from Russian crude if those products were processed in a third country. The licence covers diesel under HS codes 2710 19 42 and 2710 19 44, and jet fuel under HS code 2710 19 21. The underlying ban was introduced through the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2026 and came into force on May 20. Government guidance said the new prohibition was designed to stop Russian oil entering the UK through the “back door” after refining abroad, and said the UK approach was aligned with the EU’s. ### Why is India at the center of this? (gov.uk) India was cited by multiple reports as a key example of a third-country refining hub because it has bought large volumes of discounted Russian crude since Moscow’s 2022 invasion of Ukraine. The UK licence does not name India specifically in the legal text surfaced by the government search results, but reporting on the measure said the exemption applies to fuel refined in India or other third countries. (legislation.gov.uk) Politico reported that the UK licence exempts jet fuel and diesel made from Russian crude but refined in India or other third countries. Al Jazeera reported that the waiver would allow imports of Russian crude refined in countries including India and Turkey. ### Why did London make the exemption now? UK officials tied the move to fuel-supply risks and higher prices after the conflict involving Iran and the disruption around the Strait of Hormuz. (politico.eu) Al Jazeera reported that the trade licence is of indefinite duration, subject to periodic review, and said the change came amid soaring fuel prices caused by the Iran war and the prolonged closure of the Strait of Hormuz. Prime Minister Keir Starmer told lawmakers the government had issued “two targeted short-term licenses to phase the new sanctions in and protect U.K. consumers,” according to Politico. Trade minister Chris Bryant said the move was prompted in part by the need to protect British businesses from “instability” in energy markets sparked by the Middle East conflict. (aljazeera.com) ### Why did the EU react so sharply? Valdis Dombrovskis, the EU economy commissioner, said on May 21 that the British decision “came as a surprise” because it had not been flagged during the G7 finance ministers’ meeting in Paris on Monday and Tuesday. He said “now is not the time to roll back sanctions against Russia” and that the EU would continue to press partners, including the UK, to sustain or strengthen pressure on Moscow. (politico.eu) The EU implemented a similar ban in January, Politico reported. That left Brussels publicly defending a harder line even as London introduced an exemption to its own new regime. ### How big is the carve-out in practice? Politico cited figures from the Centre for Research on Energy and Clean Air showing diesel and jet fuel account for 99% of UK imports from refineries processing Russian crude. (politico.eu) The publication said that means the exemption effectively guts the practical effect of the new sanction for those imports. That characterization was Politico’s, based on the think tank data it cited. The British government has said the licence is being reviewed periodically rather than set to expire on a fixed date. Importers using the licence must comply with the reporting and record-keeping rules attached to UK sanctions licences under the Russia regulations. ### What happens next? The Department for Business and Trade said the licence took effect on May 20 and will be reviewed periodically. (politico.eu) EU officials said on May 21 they would keep pressing international partners, including the UK, not to ease sanctions pressure on Russia. Any further change in the UK position would be published through updated sanctions guidance, legislation, or a revised trade licence. (aljazeera.com)