Ukrainian officials and human rights groups are calling on the United States to close what they describe as a loophole that allows Russian crude to be shipped to the United States that has been refined in other countries Is.
The Biden administration banned the purchase of crude oil and other petroleum products directly from Russia in March last year, soon after the Kremlin’s invasion of Ukraine. The European Union, which has been heavily dependent on Russia for energy supplies, banned Russian crude oil in December and then petroleum products in February.
But both the United States and the European Union continue to buy Russian oil that has been refined in other countries into gasoline, fuel oil and other products. Countries such as Turkey, the United Arab Emirates, Singapore, China and especially India are buying Russian oil, which must now be sold at a lower price under limits imposed by the United States and Europe. These nations – which are described as “Laundromat” Country by environmental and human rights groups – then refine the oil and ship it to other markets.
This activity is legal: once Russian crude oil has been “substantially modified” by refining in another country, it is no longer legally Russian. The same standards apply to oil from other countries long under sanctions, such as Iran and Venezuela.
Even then, oppose this type of business is growing.
Oleg Ustenko, an economic adviser to the Ukrainian president, said that such US purchases mean “we are indirectly supporting this insurgency, which is not acceptable.”
“I don’t know how it sounds in English, but in Ukrainian I call this strategy the cockroach strategy, which means they’re trying to find all possible loopholes, like a cockroach crawling through these holes in your apartment. trying to creep in,” he said of Russia’s oil business. “And what you need to do is you need to close all these holes.”
It is difficult to estimate how much refined petroleum the United States is importing that originally came from Russia. But a report released on Thursday Global Witness, a London-based organization that advocates for the environment and human rights, suggested that the amounts were small but not insignificant.
Take India, which is one of the biggest participants in this activity. The United States imported about 152 million barrels of refined petroleum products in the first five months of this year, of which about 8 percent came from India.
According to Global Witness calculations, more than 80 percent of the refined oil imported by the United States from India comes from a single port: Sikka, in Gujarat province, which is home to the Jamnagar refinery, the world’s largest. . And in the first five months of the year, the group estimates, 35 percent of the crude arriving at the port was of Russian origin.
To stem these flows, Global Witness has proposed a ban on all imports from refineries that buy Russian crude. The group sent members to Washington last week to lobby members of Congress, including on committees that oversee energy and support for Ukraine.
“It is a common-sense decision for the US to ban oil from refineries that handle Russian crude,” said Layla Stanley, senior investigator at Global Witness.
Mr. Ustenko and Ms. Stanley said such a ban is unlikely to have much effect on US gas prices. But Tom Cloza, global head of energy analysis at the Oil Price Information Service, which tracks wholesale and retail oil prices, said he believes it will have some impact.
“If you remove that many countries as potential sources of gasoline and diesel, there will be an impact in the US and an impact in Europe,” he said.
Mr Kloza said the Biden administration may be reluctant to take any steps to raise gas prices as the election nears – and such a ban could prove difficult to police. He cited the example of Saudi Arabia, which began importing Russian diesel last year while also exporting more diesel from Saudi refineries to other countries.
“There are many ways to avoid the Russian boycott,” he said.
It also remains to be seen what such a ban would mean for US relations with India, which the Biden administration considers a key strategic partner. Jamnagar Refinery is owned by Reliance Industries, which is controlled by Indian businessman Mukesh Ambani. Mr. Ambani is a close associate of Indian Prime Minister Narendra Modi, and last week was a guest at a state dinner hosted by the White House for Mr. Modi.
