‘A dumping ground for blood oil’: Pressure mounts on Canberra over Putin trade ties

“Blood oil” is campaigners’ term for petroleum products made from Russian crude while Russia wages war in Ukraine. The phrase highlights the concern that fuel purchases can indirectly provide revenue to the Kremlin, even when the final product does not come directly from Russia.

Australia banned direct imports of Russian crude and petroleum products in 2022. However, Russian crude can be sent to a refinery in another country, such as India or Brunei, and turned into petrol or diesel. Products can also be blended with other oil or re-exported through another port before arriving in Australia.

This processing changes the product’s immediate trading route but does not remove its Russian source. The coalition says Australia imported $16.5 billion worth of petroleum products partly made from Russian oil since 2022. It wants stronger rules to close this indirect pathway.

The most striking figures are the estimated $16.5 billion in petroleum products made partly from Russian oil that Australia imported since Moscow’s full-scale invasion in 2022. The estimate comes from the B4Ukraine Coalition, which campaigns to reduce Russia’s economic resources for the war.

The coalition says these imports may have generated $1.7 billion in tax revenue for the Kremlin. That money is not described as a direct payment by Australia to Russia. Rather, the concern is that buying products made from Russian crude can support revenue linked to Russian oil, even when refining happens in another country.

The flow has continued. Australia imported an estimated $480 million worth of fuel made from Russian crude in the first seven months of the year cited. Campaigners say these figures show that Australia’s ban on direct imports leaves a significant gap.

The loophole is based on where fuel is processed, rather than where its crude oil originated. Australia banned direct imports of Russian crude and petroleum products in 2022, but the restrictions do not automatically cover petrol or diesel refined in a third country.

For example, Russian crude can be shipped to an Indian or Brunei refinery. The refinery can process it into fuel, which may then be exported to Australia. The product can also be blended with other petroleum or re-exported through another port, making the supply chain more difficult to trace.

The article identifies Australia as an increasingly important destination for Indian refineries. It also says Australia remained the main market among sanctioning countries for fuel exported from Brunei’s Hengyi refinery. Campaigners want rules that follow Russian oil through these later stages.

The B4Ukraine Coalition wants Australia to introduce a restriction based on a facility’s recent handling of Russian oil. The proposal would target the refinery or port, not only the final fuel shipment’s paperwork or immediate country of origin.

Under the coalition’s plan, Australia would ban imports from any refinery or port that had received Russian crude or refined petroleum products during the preceding six months. That rule is intended to cover fuel made after Russian crude is processed, blended, or moved through another country.

The proposal would close the pathway that campaigners say allows Russian oil to enter Australia indirectly. They are urging Prime Minister Anthony Albanese to introduce legislation and publish an implementation timetable. The call follows repeated warnings and an August Senate inquiry that recommended stronger sanctions enforcement.

The European Union’s ban produced a sharp fall in the targeted trade. Research by the Kyiv School of Economics found that European imports of petroleum products from 11 refineries processing Russian crude fell 69 per cent in the three months to April.

The article also records a major shift by Indian refineries. Their exports of Russian-derived fuel to Europe fell 97 per cent. Almost all of those products were redirected elsewhere after Europe closed its market to fuel refined from Russian crude in third countries.

The restrictions did not make the fuel disappear. Instead, the article says Australia became an increasingly important destination for Indian refinery products. Australia also remained the primary market among countries sanctioning Russia for fuel exported from Brunei’s Hengyi refinery. Campaigners say this redirection makes Australia’s lack of an equivalent ban more significant.

A phased ban could reduce disruption by giving fuel suppliers time to adjust. The article does not identify specific alternative countries or suppliers for Australia. It does, however, point to transition periods used by Europe and Britain when they introduced restrictions on fuel refined from Russian crude.

The proposed approach would set a clear timetable rather than impose an immediate cutoff. Australia could announce the stages of the ban and allow a defined period for suppliers to change their purchasing and refining arrangements. Campaigners argue that this would address concerns about fuel availability while still ending reliance on Russian-derived fuel.

The article gives no guarantee about how supply would be replaced. It reports that Kateryna Argyrou rejected claims that stronger sanctions would threaten fuel supplies, saying Europe and the UK managed transition periods. She argued that fuel made from Russian oil is not fuel security.

Crude oil is oil in its extracted, unprocessed form. Refining changes crude into products such as petrol and diesel. Blending combines oil or fuel from different sources. Re-exporting means sending an imported product onward to another country. These definitions describe the stages discussed in the article; the article uses them to explain the trade pathway.

Russian crude may first travel to a refinery in India or Brunei. After processing, the resulting fuel can be blended with other petroleum or shipped through another port before reaching Australia. The final cargo may therefore be documented as a product from the processing or exporting country, rather than as a direct Russian shipment.

This makes enforcement difficult because the product has passed through several commercial steps. Australia’s direct-import ban does not automatically stop those routes. The proposed six-month rule would focus on refineries and ports that recently handled Russian oil, rather than only the final shipment.