UK to phase out Russian oil imports, considers ban on Russian gas

The UK is ending imports of Russian oil and oil products by the end of 2022, joining the US in targeting “the main artery of Russia’s economy” over President Vladimir Putin’s invasion of Ukraine.

Britain’s business minister Kwasi Kwarteng said on Tuesday he was also exploring options to end British imports of Russian gas, which accounts for about 4 percent of supply in the country.

“The phasing out of [oil] imports will not be immediate, but instead allows the UK more than enough time to adjust supply chains, supporting industry and consumers. 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,” Kwarteng said in a statement.

The UK was working closely with the US, the EU and other partners to end its dependence on Russian hydrocarbons in response to Russian aggression in Ukraine, recognising the different circumstances and transition timelines, officials said.

“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,” British Prime Minister Boris Johnson said in a statement on Tuesday.

“Working with 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,” he added.

On Tuesday, President Joe Biden announced that the US will ban imports of Russian oil, a major escalation in the international response to Moscow’s invasion of Ukraine.

The import of Russian oil makes up 44 percent of Russian exports and 17 percent of federal government revenue through taxation – and the concerted moves are aimed at stepping up the international pressure on Russia’s economy.

EU officials on Tuesday meanwhile outlined a plan to achieve energy independence from Moscow “well before 2030”. The European Union would start by reducing demand for Russian natural gas by two thirds this year. Those plans will be discussed at an emergency summit of EU leaders in France on Thursday.

“We must become independent from Russian oil, coal and gas,” European Commission President Ursula von der Leyen said in a statement. “We simply cannot rely on a supplier who explicitly threatens us.”

Russian imports account for 8% 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. We will work closely with international partners to ensure alternative supplies of fuel products,” Kwarteng said.

Russian oil is already being ostracised by the market, with nearly 70 percent of it currently struggling to find a buyer, and in a competitive global market demand will quickly be met by alternative suppliers, he added.

Russia is the world's third-biggest oil producer, behind Saudi Arabia and the US.