Britain eases Russia oil curbs

Britain created a narrow but politically sensitive exception in its Russia sanctions this week. A trade licence that took effect on May 20 allows the import into the UK of diesel and jet fuel made in third countries from Russian crude, including fuel refined in India and Turkey. The move followed disruption to fuel markets after the Strait of Hormuz shock and came days after London formally introduced a ban on third-country processed oil products made from Russian crude. The decision has drawn criticism from Brussels and Kyiv because it cuts across the public line G7 governments have been repeating on sanctions pressure. European Economy Commissioner Valdis Dombrovskis said the decision was not flagged at the G7 finance ministers’ meeting in Paris and “came as a surprise.” Ukrainian critics said it raised doubts about Britain’s reliability as a wartime partner. (gov.uk) ### What exactly did Britain change? The UK government’s guidance says the prohibition on importing oil products processed in a third country using Russian crude was introduced on May 19 and took effect on May 20. The same guidance sets out how importers must assess whether refined products are caught by the ban. (politico.eu) A separate licence issued by Britain then carved out an exception for specific fuels during the supply disruption. Reports on May 20 and May 21 said the waiver covers diesel and jet fuel refined from Russian crude in third countries, notably India and Turkey, and is meant to address shortages after the Iran war and the Strait of Hormuz disruption hit global fuel markets. (gov.uk) ### Why do India and Turkey matter here? India and Turkey matter because both are major refining hubs that buy crude from multiple sources and export refined fuels onward. Under the British exception, fuel made there from Russian crude can re-enter the UK market even though direct Russian oil imports remain restricted. That makes the measure an exception to the newer rule on third-country processed products rather than a full repeal of Russia energy sanctions. (rigzone.com) Politico reported that the EU was caught off guard in part because the exception touches a sensitive sanctions work-around that Western governments have been trying to close. Dombrovskis said Russia was benefiting from higher energy prices linked to the Iran war and that this was therefore not the moment to relax pressure. (gov.uk) ### What did Brussels and Ukraine say? Valdis Dombrovskis said in Paris that Britain’s move had not been raised during the G7 finance ministers’ meeting earlier in the week. He said “now is not the time to roll back sanctions against Russia” because Moscow was receiving windfall gains from higher energy prices. (politico.eu) Ukrainian critics used harsher language. Coverage cited by the story brief said lawmakers in Kyiv argued the decision suggested sanctions discipline could be traded away under market pressure and put a question mark over trust in Britain’s support. Those remarks came as Ukraine continued to press allies to keep revenue-denying measures in place. (politico.eu) ### Did the G7 change its wider sanctions line? The G7’s formal line did not change at its May 18 meeting in Paris. A communiqué published on May 19 said finance ministers and central bank governors met with international institutions and reaffirmed support for Ukraine. Ukrinform, citing French Finance Minister Roland Lescure, reported the group agreed to maintain sanctions pressure on Russia to deny it revenue for the war. (ukrinform.net) That leaves Britain’s licence as a national exception inside a broader G7 position that still publicly favors continued pressure. Reuters, cited in other coverage surfaced in search results, also reported Dombrovskis saying G7 countries were not fully aligned on the waiver issue. ### What happens next? The UK licence is already in force and, according to reporting on the measure, is of indefinite duration but subject to periodic review. (g7.utoronto.ca) That means the next concrete test is whether London keeps, narrows or withdraws the exception as fuel markets stabilize and as allies continue talks on Russia sanctions. (aol.com) The next formal checkpoint for the wider coalition is the G7 leaders’ summit in France in mid-June, following the May 19 finance ministers’ communiqué. Any effort to reconcile Britain’s exception with the group’s sanctions message is likely to surface there or in follow-up EU discussions on further Russia measures. (g7.utoronto.ca) (aljazeera.com)