The UK government has loosened sanctions on Russian oil by issuing a trade licence that permits imports of diesel and jet fuel refined from Russian crude oil in third countries such as India and Turkey. The indefinite licence, published by the Department for Business and Trade, took effect on May 21 and follows months of soaring fuel prices driven by the effective closure of the Strait of Hormuz since the US-Israel war with Iran began in late February 2026. European jet fuel prices more than doubled after the conflict started, and UK petrol prices hit their highest level since December 2022. The decision drew sharp criticism from Ukraine, opposition politicians, and energy analysts, who warned it sends a damaging signal about the West’s commitment to sanctions. The move follows a similar US waiver extended by Treasury Secretary Scott Bessent days earlier.
Key Overview
- Licence type: Indefinite duration, periodically reviewed
- Effective date: May 21, 2026
- Scope: Diesel and jet fuel refined from Russian crude in third countries
- Key supply countries affected: India and Turkey
- LNG licence: Temporary, covering Sakhalin-2 and Yamal plants, expires January 1, 2027
- UK petrol price: 158.52p per litre (highest since December 2022)
- Strait of Hormuz: Effectively closed since early March 2026
- Global oil disruption: Approximately 20% of maritime oil trade affected
- US waiver: 30-day extension announced May 18 by Scott Bessent
The UK government published a trade licence on Tuesday that effectively loosens sanctions on Russian energy by allowing imports of diesel and jet fuel refined from Moscow’s crude oil in third-party countries. The measure, which took effect on Wednesday and carries no set time limit, represents a significant shift in Britain’s sanctions posture at a moment when it simultaneously reaffirmed its commitment to punishing Russia for its invasion of Ukraine.
The carve-out enables the UK to resume fuel shipments from major refining hubs like India and Turkey, which process discounted Russian crude and re-export it as refined products. India had been a key supplier of jet fuel to the UK and Europe before London announced in October that it planned to ban oil products derived from Russian crude in third countries. The UK has not imported any diesel or jet fuel from India since January, according to data from shipping analytics firm Vortexa.
A separate temporary licence was issued covering the maritime transportation of Russian liquefied natural gas from the Sakhalin-2 and Yamal production plants, running until January 1, 2027.
The Hormuz Crisis and Soaring Fuel Prices
The decision is a direct consequence of the energy shock triggered by the US-Israel war with Iran, which began in late February 2026 and led to the effective closure of the Strait of Hormuz — the narrow waterway through which roughly 27% of the world’s maritime trade in crude oil and petroleum products passes. Iranian forces declared the strait “closed” on March 4, carrying out attacks on commercial shipping and reducing transit traffic by more than 95%.
The blockade removed close to 20% of global oil supplies from the market and sent prices spiralling. The Dallas Federal Reserve estimated the closure would raise the average WTI oil price to $98 per barrel and lower global GDP growth by an annualised 2.9 percentage points in the second quarter. At its peak, Brent crude surged past $114 per barrel and analysts at Goldman Sachs warned elevated prices could persist through 2027.
The impact on refined fuels has been particularly acute. Europe’s ICE gasoil futures benchmark, the continent’s main diesel marker, traded at approximately $160 per barrel. European jet fuel prices more than doubled after the war started. In the UK, the RAC reported that the average price of unleaded petrol reached 158.52p per litre on Monday — the highest since December 2022. Multiple airlines operating in the UK cancelled flights and raised fares in response.
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Following Washington’s Lead
The UK’s move comes days after US Treasury Secretary Scott Bessent announced another 30-day extension of a sanctions waiver allowing purchases of Russian seaborne oil to aid what he called “energy-vulnerable” countries. The waiver, first introduced in March, permits access to Russian oil and petroleum products stranded on tankers at sea without violating US sanctions on Russian oil majors.
The US waiver has been expanded and extended twice since its initial issuance. Washington first opened it to Indian refiners alone before broadening it to all countries worldwide. Bessent argued the measure would “help stabilise the physical crude market and ensure oil reaches the most energy-vulnerable nations” while limiting China’s ability to stockpile discounted Russian crude.
Spain has also pursued similar measures. The UK government pointed to these precedents in defending its decision, though critics reject the comparison.
Domestic and International Backlash
The backlash was swift and came from multiple directions. Treasury minister Dan Tomlinson characterised the licence as a “small and specific” change to “protect the security of supply for really important foundational goods.” But Robin Mills, chief executive of Dubai-based energy consultancy Qamar Energy, told BBC Radio 4’s Today programme that the waiver was unnecessary, would not bring down prices, and sent a “negative signal that sanctions on Russia are potentially weaker because of the crisis in the Gulf.”
Dame Emily Thornberry, the Labour chair of the Foreign Affairs Select Committee, publicly opposed the decision, saying she had heard from people in Ukraine overnight who were “very disappointed.” She argued: “Just because other countries are behaving in the wrong way, does not mean we should join them.”
Conservative leader Kemi Badenoch called it “insane” to water down Russian sanctions when the government was simultaneously refusing to issue new North Sea oil and gas licences, noting that Labour MPs had voted against domestic licensing on Tuesday before importing from Russia on Wednesday.
Internationally, the easing of Western sanctions on Russian energy has drawn sustained condemnation. Ukrainian President Volodymyr Zelensky said in March that the US waiver could provide Russia with approximately $10 billion for its war effort, warning that “every dollar paid for Russian oil is money for the war.” Speaking in Paris alongside French President Emmanuel Macron, Zelensky said lifting sanctions would strengthen Russia’s position, adding: “Ultimately lifting sanctions only so that more drones will later be flying at you is not the right decision.”
Macron said the Strait of Hormuz’s closure “in no way” justified lifting sanctions on Russia. German Chancellor Friedrich Merz called the easing “wrong,” and European Council President Antonio Costa described it as impacting “European security”.
The Government’s Broader Sanctions Argument
The UK government sought to frame the licence as part of a package that included tougher measures elsewhere. A spokesperson said Britain had “introduced a new wave of tighter restrictions on Russia including further export and import bans” as well as restrictions on Russian uranium and a new maritime services ban on Russian LNG that would “progressively restrict Russia’s access to the UK’s world-leading shipping and insurance services.”
On Tuesday — one day before the oil licence took effect — the UK signed a G7 statement reaffirming its “unwavering commitment” to impose “severe costs” on Russia. The timing underscored the tension between diplomatic posture and practical energy policy.
The broader question is whether the sanctions regime can survive sustained energy price shocks. With the Strait of Hormuz remaining effectively closed, oil markets structurally disrupted, and domestic fuel costs at politically painful levels, the UK’s decision signals that even committed sanctions enforcers will bend when the economic pressure becomes acute enough — a precedent that critics warn Moscow will exploit.
Sources: Al Jazeera / The Moscow Times / Bloomberg / Rigzone / ITV News / Yahoo News / BBC News / US News & World Report / Euronews / Dallas Federal Reserve / Congressional Research Service / CNBC / RFE/RL / Associated Press / Business Standard
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