Filenews 27 April 2023
By Jeff McMahon
Five countries have increased imports of Russian oil in the wake of Russia's invasion of Ukraine and refined it into products that they then sell to countries that have sanctioned Russian crude, according to a report by the Centre for Research on Energy and Clean Air (CREA).
The laundering operation undermines the cap imposed on Russian crude and thus fuels the Russian war machine, analysts say.
"All of this is a legal way to export petroleum products to countries that have imposed sanctions on Russia, as it changes the origin of the product in this way," according to the report, which adds: "This process provides funds to (Russian President Vladimir) Putin's war machine."
CREA lists China, India, the United Arab Emirates, Turkey and Singapore as "laundering countries" that have increased imports of Russian crude following Moscow's invasion of Ukraine. These countries have also increased exports of refined products to countries that have imposed a cap on Russian crude, including the European Union, Australia, Japan, the United Kingdom, Canada and the United States.
"The EU, G7 and Australia continue to import Russian fossil fuels as refined products from third countries and allow transportation on their ships and insurance," said Isaac Levi, an analyst and co-author of the report.
The EU is the largest importer of these refined products, according to CREA, followed by Australia. And most of the "rinsed" refined products are transported by European ships.
In the year following Russia's invasion of Ukraine, the five laundering countries increased seaborne imports of Russian crude by 140 percent from a year earlier, according to the report, absorbing 70 percent of Russian crude exports.
Meanwhile, those countries have increased their exports of petroleum products by 26 percent to countries that have imposed a cap on Russian crude. Their exports to countries that have not imposed a cap have increased by just 2%, indicating that most of Russia's crude ends up in countries that adhere to the cap.
"The increase in imports of petroleum products from the main importers of Russian crude undermines the sanctions imposed on Russian crude," said Lauri Myllyvirta, chief analyst and co-author of the report. "On the other hand, restricting this trade represents an opportunity to cut off funding for Russia's brutal invasion of Ukraine."
Russian crude ends up in countries that have imposed the cap as diesel and jet fuel.
According to CREA, the EU spent 19.3 billion dollars on this project for these products of Russian origin in the 12 months following the Russian invasion of Ukraine.
- Australia with 8.74 billion dollars.
- USA with 7.21 billion dollars.
- United Kingdom with 5.46 billion dollars.
- Japan with 5.24 billion dollars.
Source: Forbes
