UK loosens sanctions on Russian-refined fuel as prices rise

The UK has loosened sanctions on Russian oil products refined in third countries, in a move that affects diesel and jet fuel imports. The waiver begins on Wednesday and comes as fuel prices rise and supply concerns grow. The government also lifted some sanctions on the transport of Russian liquefied natural gas, or LNG.

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Officials said the overall sanctions regime remained tougher, but that extra flexibility was needed. The change applies to processed oil products made from Russian crude outside Russia, including fuel refined in places such as India and Turkey. The new rules for sanctioned processed oil products will run for an indefinite period, although they will be reviewed periodically and may be amended or revoked.

The government said the move was driven by concerns over fuel supply, including the effective blockade of the Strait of Hormuz since the start of the US-Israel war with Iran. A similar move by the US has already drawn criticism. The decision comes after the UK had, since October, banned imports of diesel and jet fuel refined from Russian crude oil in third countries.

It also follows a period of sharp increases in fuel costs. The average price of unleaded petrol reached 152.52p a litre on Monday, according to the RAC, the highest since the start of the war. European jet fuel prices more than doubled after the war began and are now around half higher, while several airlines operating in the UK and elsewhere have cancelled flights or raised prices.

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The policy shift matters because the UK has been one of the leading countries pressing economic pressure on Russia over its war in Ukraine. Only on Tuesday, it signed a G7 statement reaffirming its "unwavering commitment" to impose "severe costs" on Russia. The new waiver therefore marks a limited easing in one area of sanctions at a time when governments are trying to balance pressure on Moscow with the need to keep energy markets supplied.

It also highlights how disruptions in one part of the global energy system can quickly affect prices and transport costs elsewhere. The wider context is that Russian crude is often refined outside Russia before being sold on international markets, making sanctions enforcement more complex. The UK move appears designed to preserve pressure on Russian energy revenues while reducing the risk of shortages in fuels used by motorists and airlines.

The government said the sanctions overall had got tougher, but that extra flexibilities were required. The time-limited LNG licence, which covers maritime transport and related services under Russia sanctions rules, runs until 1 January. What remains unclear is how much the waiver will change actual supply flows and whether it will ease prices in the near term.

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