Russia is making less money from its fossil fuel exports but Turkey is becoming a backdoor route to export Russian oil to the EU, a “loophole” in the sanctions, an independent research center warned Wednesday.
The publication by the Finland-based Centre for Research on Energy and Clean Air (CREA) comes as Ukraine was targeted on Tuesday by intense Russian shelling on infrastructure and a missile of unknown origin fell in Poland.
“Would this be possible if the Russians did not have access to financing? Everyone understands that it would not,” said Oleg Ustenko, economic adviser to Ukrainian President Volodymyr Zelensky.
“It is ridiculous that they still receive nearly 700 million (euros) per day from their fossil fuels,” he added via video conference during a presentation of the report at COP27 in Egypt.
He called for a cap on Russian energy prices and an immediate ban on all refined products from Russia.
“This should be banned right away by the EU and all our allies like the US and the UK but also all others, including of course Turkey,” he said.
According to the report, Russia collected 21 billion euros from its fossil exports in October, down 7% from September and the lowest since the invasion of Ukraine began. Revenues for all products declined, with the exception of liquefied natural gas (LNG).
Revenues from exports to the European Union fell by 14% to 7.5 billion.
The EU has decided on a progressive embargo on its imports of oil and oil products, with a few exceptions. It has also already stopped buying coal, but Russian gas, on which it is heavily dependent, is not affected for the time being.
However, AERC warns of a new backdoor route through which Russian oil finds its way to Western countries.
“A new route for Russian oil to the EU is emerging via Turkey, where an increasing amount of Russian crude is refined,” warn the authors, whose work is to be presented at COP27.
Turkey has indeed increased its imports of crude from Russia since the invasion of Ukraine. And exports of petroleum products from Turkey to European and U.S. ports jumped 85% in September-October compared to the July-August period, the report said.
“As the EU will ban crude imports from Russia on Dec. 5, this loophole could become significant,” CREA points out.
The research center thus considers it “essential” that the EU and the United States implement a stricter embargo by renouncing oil products from refineries that accept Russian crude.
