In response to Russian President Vladimir Putin’s illegal invasion of Ukraine, the UK will phase out imports of Russian oil by the end of the year, Business Secretary Kwasi Kwarteng confirmed on March 8, 2022. The phasing out of imports will not be immediate, but instead allows the UK more than enough time to adjust supply chains, supporting industry and consumers.
The UK is working closely with the United States (US), the EU, and other partners to end its dependence on Russian hydrocarbons in response to Russian aggression in Ukraine, recognizing the different circumstances and transition timelines.
Russian imports account for 8 percent of total UK oil demand, but the UK is also a significant producer of both crude oil and petroleum products, in addition to imports from a diverse range of reliable suppliers beyond Russia including the Netherlands, Saudi Arabia, and the US.
In a competitive global market for oil and petroleum products, demand can be met by alternative suppliers. The government will work with companies through a new Taskforce on Oil to support them to make use of this period in finding alternative supplies.
Whilst this transition takes place, the government says it recognizes the need to continue to import Russian oil in the meantime as it works to this aim. This will help ensure continuity in our supply and protect consumers.
In another economic blow to the Putin regime following their illegal invasion of Ukraine, the UK will move away from dependence on Russian oil throughout this year, building on our severe package of international economic sanctions. Working with the industry, we are confident that this can be achieved over the course of the year, providing enough time for companies to adjust and ensuring consumers are protected, said Prime Minister Boris Johnson.
The import of Russian oil makes up 44 percent of Russian exports and 17 percent of federal government revenue through taxation – this move steps up the international pressure on Russia’s economy.
Unprovoked military aggression will not pay and we will continue to support the brave people of Ukraine as they stand up to tyranny, building on our existing sanctions that are already crippling Putin’s war machine. We have more than enough time for the market and our supply chains to adjust to these essential changes. Businesses should use this year to ensure a smooth transition so that consumers will not be affected. This significant move will increase the growing pressure on Russia’s economy by choking off a valuable source of income and hitting its ability to impose further misery on the Ukrainian people, Business and Energy Secretary Kwasi Kwarteng said.
The elimination of oil imports is in addition to existing trade, financial and personal sanctions already imposed by the UK against Putin’s regime and those who support him in his war against Ukraine.
Call to fast-track homegrown
Russian oil is already being ostracised by the market, with nearly 70 percent of Russian oil currently struggling to find a buyer, and in a competitive global market, demand will quickly be met by alternative suppliers.
On March 1, 2022, Russian vessels were banned from UK ports, and authorities were granted new powers to detain Russian vessels.
We welcome the Government’s ban on Russian oil imports and hope similar action on gas quickly follows. The UK should not be helping to inadvertently fund the invasion of Ukraine and we stand in solidarity with the Ukrainian people, commented Amy MacConnachie, Director of External Affairs at the Association for Renewable Energy and Clean Technology (REA).
The UK is not dependent on Russian natural gas, making up less than 4 percent of its supply. Ministers are also exploring options to reduce this further.
Although only accounting for a relatively small amount of the UK’s oil and gas supplies, we know that the Government will need to take significant action to replace any shortfall. However, it is crucial that the Government looks to accelerate the deployment of renewables for its homegrown energy, rather than regressively binding the UK to more fossil fuels. That means boosting home insulation, replacing gas boilers with green alternatives, and ramping up the installation of renewables and cleantech, both domestically and at a utility-scale. Our sector stands ready to deliver an energy future that is independent, secure, and stable, said Amy MacConnachie.
