Yahoo Finance UK set to ban Russian oil imports
The UK is set to phase out the import of Russian oil and oil products by the end of 2022, following similar moves by the US.
The government said the transition period will give the market, businesses and supply chains more than enough time to replace Russian imports, which make up 8% of UK demand.
Britain is less reliant on Russian fossil fuels than many European countries. Beyond Russia, the vast majority of UK imports come from partners such as the US, Netherlands and the Gulf.
The ban is not set to apply to Russian gas.
“Businesses should use this year to ensure a smooth transition so that consumers will not be affected,” Kwasi Kwarteng, secretary of state for business, energy and industrial strategy, said on Twitter.
“The government will also work with companies through a new taskforce on oil to support them to make use of this period in finding alternative supplies.”
Read more: Shell pledges to stop buying Russian oil and gas
It comes as president Joe Biden confirmed a complete US ban on Russian oil, gas and coal imports in a speech at the White House on Tuesday.
"The American people will deal another powerful blow to Putin's leadership," he said. "Americans have rallied to support the Ukrainian people, and made it clear we will not be part of subsidising Putin’s war."
He highlighted that the ban on Russian oil imports had bipartisan support in Congress, as well as widespread support nationwide amid skyrocketing gas prices.
“This is a step that we’re taking to inflict further pain on Putin, but there will be further cost as well here in the United States,” he added.
“I said I would level with the American people form the beginning. When I first spoke of this in the beginning, I said defending freedom is going to cost us as well in the United States. Republicans and Democrats alike understand that. Republicans and Democrats alike have been clear that we must do this.”
Read more: European stock markets eke out gains as Russia threatens to cut gas supply
The European Union also made moves on Tuesday to reduce the continent's reliance on Russian gas, saying it aims to cut its demand by two-thirds by the end of the year. But Germany has so far resisted any prohibition on buying Russian crude.
Oil prices surged in anticipation of the announcements, with the price of Brent crude (BZ=F), the international benchmark, rising more than 7%, to $132 a barrel. On Monday, it had climbed as high as $139 – its highest since 2008.
Russia is the world’s largest oil exporter, and shipped almost 8 million barrels a day of crude and petroleum products to global markets at the end of last year, according to the International Energy Agency.
About 60% of Russia’s oil exports go to Europe, with 2% to the UK, while around 8% goes to the US. China accounts for about 20%.
“Driven by headlines, the international oil market continues to create havoc with oil prices. Russian imports make up a tiny amount of US’s energy needs, but Joe Biden’s bold unilateral ban on imports of Russian oil, LNG, and coal as part of the latest round of sanctions pushed oil prices to pass U$120/barrel," Pratibha Thaker, editorial and regional director for Middle East and Africa at the Economist Intelligence Unit, said.
"Europe’s move in the same direction is likely to be slower, but the ripple effects from the invasion, oil sanctions against an extremely tight energy market points to elevated triple digit prices remaining for the moment.”
