Labour has quietly softened part of Britain’s sanctions regime against Russia, allowing certain fuel products derived from Russian crude oil to continue entering the UK despite previous pledges to tighten restrictions on Moscow’s energy revenues.
Under revised rules, diesel and jet fuel refined in third countries using Russian-origin crude will still be permitted into Britain, marking a significant retreat from earlier commitments made by Chancellor Rachel Reeves to clamp down on Russian oil entering global supply chains.
The reversal comes as ministers grapple with mounting fears over energy prices and potential supply disruption linked to tensions in the Middle East and instability around the Strait of Hormuz, one of the world’s most strategically important shipping routes.
Last year, Ms Reeves defended tougher sanctions as “the right approach to ensure that Russian oil is not finding its way onto global markets and indeed, finding its way into UK markets”.
She also pledged that the Government would take “whatever actions necessary” to undermine President Vladimir Putin’s ability to continue the war in Ukraine.
However, the Treasury and energy officials have since faced growing concern over the inflationary impact of tighter restrictions on refined fuel imports, particularly following disruption linked to conflict involving Iran and fears surrounding the closure of Hormuz.
While diesel and aviation fuel refined outside Russia using Russian crude will now be allowed, other products — including petrochemicals and heating oil derived from Russian-origin feedstock — remain prohibited.
The move leaves Britain taking a softer line than the European Union, which has maintained restrictions on refined products made from Russian oil even when processed through intermediary countries.
Critics are likely to argue that the shift undermines Britain’s moral and diplomatic position on the Ukraine war by continuing to provide indirect economic outlets for Russian crude exports.
The policy adjustment comes as ministers brace for renewed pressure on household finances. Yvette Cooper has warned that disruption in the Strait of Hormuz risks the world “sleepwalking into a global food crisis”, while retailers have raised concerns over rising commodity and energy costs.
According to reports, ministers are also exploring voluntary price caps on essential groceries including bread, eggs and milk as part of wider cost-of-living measures expected from the Chancellor later this week.
Helen Dickinson, chief executive of the British Retail Consortium, said retailers were facing pressure from both global energy shocks and the cumulative impact of domestic policy costs.
The United States has also loosened aspects of its sanctions enforcement in response to volatile oil markets, introducing a temporary waiver allowing Indian refiners to continue purchasing Russian crude at sea.
That decision drew fierce criticism from senior Democrats including Elizabeth Warren and Jeanne Shaheen, who described it as an “indefensible gift” to the Kremlin.
Meanwhile, Mr Putin arrived in China this week for talks with Xi Jinping focused partly on expanding Russian gas exports eastward through the proposed Power of Siberia 2 pipeline, a project seen as central to Moscow’s efforts to offset the collapse of European energy markets since the invasion of Ukraine.
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