Britain eases Russian fuel sanctions

Britain on May 20 changed its Russia sanctions regime to allow imports of diesel and jet fuel refined in third countries from Russian crude, according to guidance and licence notices published by the Department for Business and Trade. The new rules took effect on May 20 and sit alongside a separate general licence on maritime transportation of liquefied natural gas that expires on Jan. 1, 2027. London has said the move is a licensing adjustment tied to energy security, not a rollback of sanctions. Ukraine and some British critics have said it opens a route for Russian hydrocarbons to keep reaching Western markets. ### What exactly did Britain change on May 20? The Department for Business and Trade said on May 19 that a new prohibition on oil products processed in a third country from Russian crude would take effect on May 20, but the government simultaneously issued a licence that permits imports of diesel and jet fuel refined outside Russia from Russian crude. Official guidance says the broader ban covers oil products under HS code 2710 that were processed in a third country from Russian-origin crude. The government also published a separate general trade licence on liquefied natural gas on May 19. That licence authorises maritime transportation of LNG and related ancillary services and expires on Jan. 1, 2027, according to the notice. ### How does Russian fuel still reach Britain if the crude was refined elsewhere? (gov.uk) Kyiv Post reported that the British licence allows imports of jet fuel and diesel refined from Russian crude in third countries including India and Turkey. The practical effect is that Russian-origin crude can be processed outside Russia and then shipped onward as refined product to the UK market. (gov.uk) GOV.UK guidance published on May 19 said the new third-country processing ban was designed to stop Russian oil entering the UK by the “back door.” The diesel and jet fuel licence creates an exception to that rule for those products even as the wider prohibition remains on the books. (kyivpost.com) ### What has the British government said in its defense? Prime Minister Keir Starmer said the policy did not amount to lifting existing sanctions, according to Kyiv Post. Treasury minister Dan Tomlinson told Sky News the change was about “protecting the UK national interest” after the effects of the conflict involving Iran hit fuel markets, Reuters reported. (gov.uk) The official statutory guidance updated on May 20 still says UK sanctions are intended to pressure Russia over actions that destabilise Ukraine. The same guidance says it remains prohibited to participate intentionally in activity meant to circumvent the sanctions regime. ### Why is Ukraine calling this a loophole? (kyivpost.com) Dmytro Lytvyn, a communications adviser in Ukraine’s presidential office, said on May 20 that “very active communication” was under way with British counterparts to clarify the scope and implications of the decision. Kyiv Post said Ukrainian officials were seeking clarification even as London insisted the measures did not weaken sanctions. (gov.uk) Kemi Badenoch, Britain’s Conservative opposition leader, said on X that the Labour government had issued a licence allowing imports of Russian oil refined in third countries, Reuters reported. Her criticism echoed Kyiv’s argument that the measure could undermine the stated goal of cutting Kremlin energy revenues. (kyivpost.com) ### Where does this leave Britain with Europe and the G7? Valdis Dombrovskis, the European Union’s economy commissioner, said on May 19 that it was not a time to “ease pressure on Russia,” according to Reuters. Euronews reported that Brussels was discussing tougher action, including a possible ban on maritime services for Russian oil tankers tied to the so-called shadow fleet. (straitstimes.com) The British move also came after the United States extended a waiver for some Russian oil cargoes already at sea, Reuters reported. That sequence has complicated efforts by European officials to present a united line on energy sanctions as fuel prices rise. ### What happens next? (straitstimes.com) Jan. 1, 2027 is the stated expiry date for Britain’s LNG general trade licence, while the diesel and jet fuel licence is described in reporting as indefinite and subject to periodic review. Ukrainian officials said on May 20 that talks with London were continuing, and EU officials were still sounding out partners on possible new shipping restrictions targeting Russia’s tanker network. (straitstimes.com) (kyivpost.com)