Human Rights Group Calls on US to Close Loophole Allowing Refined Russian Oil Imports

An international human rights organization on Thursday released a report revealing how a loophole in the Russian oil ban passed in the United States after President Vladimir Putin's military invaded Ukraine 16 months ago has allowed millions of barrels of oil from the country into unwitting Americans' gas tanks, as the group called on lawmakers to strengthen sanctions on the product.

Analyzing financial markets data, U.K.-based Global Witness found that in the first five months of 2023, the U.S. imported an estimated 12 million barrels of refined petroleum products from India, which is a top so-called "laundromat country" that refines Russian crude oil and ships it to the U.S., Europe, and elsewhere.

The practice is legal, as once Russian crude oil goes through the refining process in a third country it is no longer considered Russian.

But Global Witness denounced the loophole as "unacceptable."

"With Independence Day around the corner, the U.S. driving season is in full swing," said the group. "What vacationers filling their tanks don't know is that, despite everything the U.S. has done to support Ukraine, the gasoline they buy may still have originated in Russia and helped the Kremlin pay for the war."

The group determined that more than 80% of the refined petroleum that the U.S. imports comes from one port in Gujarat province, India. The Sikka port sends crude oil to the Jamnagar Refinery—the largest refinery in the world and the biggest importer of the product from Russia. In the first five months of 2023, 35% of the crude that arrived at Sikka was from Russia.

Of the 152 million barrels of oil the U.S. imported between January and June 2023, 8% came from India.

"This trade virtually ensures that some of the gasoline and diesel that the U.S. buys from India contain Russian molecules," said Global Witness. "On arrival from India, shipments of gasoline and other refined fuels are delivered to ports from New Jersey to Texas to California. From there, they will be sold to unwitting consumers who believe that no Russian oil has been allowed into the country for over a year."

Josep Borrell, high commissioner of the European Union for foreign affairs and security policy, called the continued use of refined Russian oil a "circumvention of sanctions" earlier this month, noting that the E.U. has also been continuing to purchase refined petroleum from India since banning Russian oil imports a year after Putin's invasion.

"If Indian refiners are selling, that is because European companies are buying, directly or through an intermediary." said Borrell.

Oleg Ustenko, an economic adviser to Ukrainian President Volodymyr Zelenskyy, told The New York Times that the U.S. is "indirectly supporting this insurrection" if it continues supporting Russia's oil export activity.

"I'm calling this strategy as a cockroach strategy, meaning they are trying to find all possible loopholes, as a cockroach trying to crawl through these holes into your apartment," he told the outlet. "And what you need to do, you need to close all these holes."

Global Witness, which sent several of its members to Washington, D.C. last week to lobby lawmakers on the issue, called closing the loophole through legislation "a no-brainer."

"First, it will indirectly squeeze Kremlin revenues, further hampering its ability to wage war on Ukraine and boosting America's efforts to support Ukrainian sovereignty," said the group. "Second, it will end a largely symbolic gap in the sanctions measures that the U.S. has already enacted."

The organization said lawmakers should ban the import of refined oil that have purchased any Russian crude within a certain time period, such as the previous six months.

"This would incentivize those companies to drop their Russian suppliers, while signaling to other companies looking to capitalize on cheap Russian oil that their products are not welcome in the U.S.," said Global Witness.

Anticipating that oil companies will use the strengthened sanctions "as a flimsy excuse to increase production in the U.S.," Global Witness said such a move would be "unjustified and unacceptable," considering the climate emergency and planetary heating.

"The U.S., which has emitted the most greenhouse gases of any country, bears far and away the most responsibility for speeding a global just transition to local renewable energy," said the group. "It should also use all the tools at its disposal to end the trade of oil funding the war on Ukraine."