Russian oil imports to the UK dry up for first time on record: official data

The UK imported no crude oil or refined products from Russia in June for the first time on record, according to UK trade data, following phased sanctions on imports of Russian oil over the invasion of Ukraine.

As a result of the UK's phase-out of Russian oil and gas imports, there were no flows of refined oil, crude, gas or coal, coke and briquettes from Russia in June, the Office for National Statistics said.

The UK government said early March the country would phase out Russian oil imports by the end of 2022 and end imports of Russian liquefied natural gas "as soon as possible" thereafter.

Prior to Russia's Feb. 24 invasion of Ukraine, it was the UK's largest supplier of refined oil in 2021, accounting for 24.1% of all imports, also supplying 5.9% of the UK's crude oil imports, and 4.9% of the UK's gas imports.

For the 12 months to February 2022, the value of Russian fuel imports had averaged GBP499 million ($589 million), according to ONS data.

The value of crude imports averaged GBP105 million over the same pre-war period, with gas imports averaging GBP95 million and coal and coke GBP18 million, it said.

While imports of Russian oil are allowed during the sanctions phase-in period, businesses have been encouraged to secure oil from alternative sources. As a result, the UK's imports of refined products from Belgium, Kuwait, the Netherlands and Saudi Arabia rose in recent months, according to ONS data.

The US, Norway, Guyana, and Angola were the biggest suppliers of additional crude to the UK in June compared to pre-war levels, the data showed, with a combined additional value of GBP1.04 billion.

For oil products, Saudi Arabia was the biggest additional supplier in June to the UK compared to pre-war levels, with Belgium, the UAE, South Korea, and the Netherlands leading other countries supplying additional imports.

Indirect imports?

With EU sanctions on Russian oil also ramping up by year-end, the trade bloc has replaced some 500,000 b/d of direct Russian imports with alternatives from the Netherlands, Saudi Arabia and Turkey since the start of the war, according to vessel-tracking data.

But part of the alternative flows are likely to be either Russian products reblended in trading hubs, processed Russian crude resold as non-Russian product exports, or Russian cargoes transferred at sea, according to market watchers.

Tankers carrying Russian-origin crude have been increasingly transferring their cargoes to other ships in offshore operations, a maneuver frequently used to evade sanctions by concealing the origin or destination of seaborne oil cargoes.

Most of the boom in ship-to-ship transfer activity involving Russian crude has taken place in waters off Spain and South Korea with the majority of the transferred cargoes ending up in China and India.

The value of the UK's fuel imports from South Korea, for example, jumped to GBP151 million in June, the ONS data showed, from an average of just GBP33 million in January and February.

EU product imports from the Amsterdam-Rotterdam-Antwerp refining hub remained around 40% higher than pre-war levels in the first half of August, according to shipping data provider Kpler, while the region has been sourcing more fuel from Italy and Turkey, both countries where some domestic refiners have been processing more Russian crude.

Outside Europe, flows of oil products likely from re-blended Russian stocks are on the rise.

The UAE's eastern port of Fujairah is now a key supplier of fuel oil to the US, which is importing record levels from Fujairah recently as Russian fuel oil is diverted from Europe to the Middle East.

Prior to February, there were only seven instances when Fujairah sent fuel oil to the US since January 2017, according to Kpler.