India offers Russian oil back door to Britain

[ad_1]

“Before the conflict, it was very rare for Indian refineries to process Russian crude,” says Alan Gelder, refining expert at Wood Mackenzie. Now, about one in every five barrels of crude oil that’s being processed is Russian.

“that they [Indian refiners] They always export to Europe, but they export more now because it’s more attractive because diesel prices in Europe are higher: it’s shorter than diesel because of the conflict between Russia and Ukraine.

“A large part of this diesel that they are producing now will be based on Russian crude oil.”

India and China “are exporting diesel — and some of it will come from Russia,” says Steve Sawyer, director of refining at Fact Global Energy.

He stressed that Western restrictions on Russian oil were not intended to completely stop Russian oil exports, due to its importance in the global market.

The UK only banned imports of Russian oil and diesel on December 5th. Under these rules, an imported barrel is deemed to have come from the last country where “substantial processing” took place.

This means that crude oil from Russia that is refined into diesel elsewhere, such as in India, can be legally imported into the UK. The rule stems from longstanding tax rules, though activists fear it amounts to a loophole propping up Russian coffers.

Seven shipments from Jamnagar have arrived in the UK since the ban on Russian oil and diesel imports came into force last month.

“Exploiting this loophole by bringing Russian oil in the back door puts money in the Kremlin’s pocket, violates the spirit of the UK embargo and undermines BP and Shell’s condemnation of the war in Ukraine,” said Lewis Wilson, senior campaigner at Global Witness. “

Shell said: “Shell has taken its decision to withdraw from all Russian hydrocarbons out of conviction. We are doing so, in line with the guidance of European governments, including the UK, and in full compliance with applicable sanctions, laws and regulations.

“Under the continued guidance of these governments and through our strict internal controls, including strict contract clauses with non-Russian-origin suppliers, we seek to avoid fuels that may contain products refined in Russia.”

BP said: “BP takes compliance with sanctions and export controls very seriously and seeks to comply with all applicable regulatory frameworks around the world. We continue to have very stringent processes and controls in place to maintain compliance with applicable trade sanctions, including UK sanctions against Russia.” .

“We conduct comprehensive checks on all commercial counterparties and certificates of origin and use other documents to prove the origin of products.”

A government spokesperson said: “In light of Putin’s illegal invasion of Ukraine and the weaponization of energy, the government has taken steps to end all imports of Russian fossil fuels including banning oil and petroleum products. Importers must be able to provide proof that the goods are not of Russian origin.”

Trafigura, PetroChina and Essar did not comment.

[ad_2]