EU sanctions on Russian diesel to take effect in six months – Bloomberg

Part of the new EU sanctions package against Russia, aimed at restricting the flow of fuel made from Russian crude oil, will only come into force in January 2026.

Source: Bloomberg

Quote: "The European Union said a new set of measures aimed at restricting the flow of fuel made from Russian crude won’t take effect until January, easing some concerns that they would tighten a diesel market in the region that’s already soaring." 

Details: Documents published over the weekend state that the ban will come into force on 21 January next year. This step effectively blocks one of the main loopholes used to bypass sanctions on Russian supplies. Previously, major buyers of Russian crude oil such as India were able to refine the cheap Russian crude oil and then sell the resulting fuel to Europe.

The statement followed Friday’s announcement that the group would push for a ban on the import of oil products, primarily diesel, that are produced in third countries from Russian crude oil.

"The EU has given diesel markets some breathing room with the last-minute publication of the six-month transitional period for imports of Russian refined products obtained from third countries," said Florence Schmit, an analyst at Rabobank.

Background:

• On 18 July, the Council of the EU adopted the 18th package of economic and individual restrictive measures targeting Russia’s energy, banking and military sectors, as well as its trade with the EU.
• Despite the new EU sanctions, oil prices remain largely unchanged.
• Earlier, it was reported that Russia’s quarterly revenues from fossil fuels have dropped to their lowest level since Moscow invaded Ukraine in 2022.

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