The United Kingdom has postponed the enforcement of certain sanctions targeting Russian oil and liquefied natural gas (LNG) in an effort to mitigate skyrocketing energy prices, as the ongoing conflict in the Middle East continues to disrupt global supply chains.
Trade Licences and Waivers
A trade licence that came into effect on Wednesday permits the import of jet fuel and diesel that have been refined from Russian crude oil in third countries. Additionally, another waiver temporarily lifts restrictions on the shipping of LNG from two Russian terminals. These measures are designed to provide short-term relief to consumers and businesses facing soaring fuel costs.
Government Justification
Prime Minister Keir Starmer denied that the decision to delay the full implementation of the sanctions—originally announced in October last year—would reduce pressure on Moscow. He pledged to continue working with international allies on further sanction packages. Speaking in the House of Commons, Starmer described the waivers as "short-term" measures aimed at protecting consumers from the impact of the crisis and part of a "phase-in" of tougher new penalties targeting the Kremlin. He stated, "This is not a question of lifting existing sanctions in any way whatsoever, and we will continue to work with our allies on further sanction packages."
Business Minister Chris Bryant echoed this sentiment, telling MPs that the forthcoming sanctions would be crucial in "ratcheting up the pressure on the Russian regime." However, he emphasised that the government was implementing them "in a phased way" due to the instability in energy markets caused by the Middle East conflict. Bryant noted that the UK's approach aligns with that of Canada and Australia and that the decision would be reviewed "as soon as possible."
Context and Criticism
The UK has been at the forefront of international efforts to impose economic pressure on Russia over its war in Ukraine. On Tuesday, it signed a G7 statement reaffirming an "unwavering commitment" to imposing "severe costs" on Russia. Previously, the UK had announced it would block Russian oil refined in other countries to "further restrict the flow of funds to the Kremlin."
Opposition politicians condemned the decision to postpone the sanctions. Conservative leader Kemi Badenoch posted on X: "After 18 months of 'standing up to Putin' the Labour govt quietly issued a licence allowing imports of Russian oil refined in third countries. Yesterday Labour MPs voted against UK oil and gas licences. We are now importing from Russia instead of drilling in the North Sea. Insane."
The decision mirrors similar moves by the United States as Iran's blockade of the Strait of Hormuz continues to disrupt global energy supplies, deepening concerns that the world may soon face a shortage of spare energy capacity. This week, US Treasury Secretary Scott Bessent extended a 30-day sanctions waiver allowing the purchase of Russian oil shipments already at sea. He stated that the extension would "provide additional flexibility, and we will work with these nations to provide specific licences as needed."
Impact on Fuel Prices and Airlines
On Tuesday, the RAC reported that the average price of a litre of petrol at UK forecourts stood at 158.5p, the highest since December 2022. Several major airlines have been forced to cancel flights and raise prices due to the surging cost of jet fuel since the war began in the Middle East, a region that previously supplied about a third of Europe's jet fuel.
Prime Minister Starmer also confirmed a widely expected extension to the temporary 5p cut in fuel duty. Announcing the freeze until the end of the year and a vehicle tax break for the haulage industry, he told the Commons that these were necessary responses to cost-of-living pressures.
Implications for Imports
Relaxing sanctions will allow imports of jet fuel from India, a previous significant supplier to the UK and Europe. Russian crude is also refined in large quantities in Turkey. Emily Thornberry, chair of the foreign affairs committee, criticised the timing of the relaxation. She told BBC Radio 4's Today programme: "I've heard from people in Ukraine overnight and I know that they are very disappointed and have been asking me why it is that Britain is doing this." Thornberry added that every time Vladimir Putin comes to the negotiating table, "he just takes the mickey." She concluded: "He needs to really feel the impact of continuing to be involved in the war in Ukraine and we should not take a foot off the pressure now."
