In March 2022, Australia implemented a formal ban on imports of Russian crude oil and refined petroleum. The intent was to cut financial flows that support Russia’s military operations in Ukraine. However, two years later, refined fuels produced in countries such as India and Turkey, which purchase discounted Russian crude, are reaching Australian markets. This practice bypasses the intent behind the sanctions and exposes weaknesses in trade oversight.
At present, oil products refined in India make up roughly 10% of Australia’s total refined fuel imports, according to recent data. Rather than importing directly from Russia, Australian buyers are obtaining fuel from intermediaries that process Russian crude. The Department of Foreign Affairs and Trade concedes there are challenges in tracing the exact origin of refined fuels once they pass through other nations. No global mechanism currently exists to track the movement of such indirectly sourced products, making it difficult to eliminate economic links with Russia.
This issue raises concerns about ethical supply chains and environmental, social and governance (ESG) standards. Although the imports may be technically lawful, sourcing fuel refined from sanctioned Russian oil undermines Australia's political stance and risks contributing to the funding of ongoing conflict. With growing pressure both within Australia and internationally, advocacy groups are urging the government to act and address what they have labelled a “deadly loophole” in the sanctions regime.
The matter goes beyond compliance with trade rules. It reveals a deeper tension between the goals of national policy and the functioning of global energy markets. While reform to enforcement systems or stricter import controls appears possible, for now, Australia's fuel supply continues to function within a morally ambiguous space.
