Brussels continues to pursue its policy of sanctions against Russia. The EU has adopted another package of sanctions against Russia, with an emphasis on hydrocarbon resources.
The European Union has banned the import of petroleum products from Russian oil. The decision will take effect in six months, as a significant proportion of diesel fuel produced from Russian oil is supplied to the EU. According to the EU statement, ‘from 21 January 2026, the purchase, import or transfer, directly or indirectly, of petroleum products obtained in a third country from crude oil from Russia will be prohibited.’ Brussels intends to require importers to provide proof of the country of origin of the oil used to refine petroleum products in a third country. The EU decision emphasises that “petroleum products imported from third countries that were net exporters of crude oil in the previous calendar year are considered to have been obtained from their own crude oil, unless the competent authority has reasonable grounds to believe that they were obtained from Russian crude oil.”
The sanctions affected an Indian company owned by Rosneft. The Russian company has a 49% stake in Nayara Energy, the second-largest refinery in the country. The Vadinar refinery, with a capacity of 20 million tonnes per year, is one of the largest suppliers of diesel fuel and jet fuel to Europe. Petroleum products supplied to Europe are mainly derived from Russian oil, as this was not previously prohibited by EU sanctions.
After the EU banned imports of Russian oil, with the exception of supplies via the Druzhba pipeline, European countries lost their main supplier of diesel fuel. India became the main supplier, significantly increasing its purchases of oil from Russia, accounting for about 30% of all imports. This allowed Indian refineries to earn money and provide Europe with fuel. Indian diesel supplies to EU countries amount to approximately 20 million tonnes. India has become the leader in fuel supplies to the European Union, overtaking the United States.
At the same time, no new refineries have been built in Europe in recent years, and old ones have been closed. The current situation will increase the European market’s dependence on imports. In 2024, more than 40% of diesel fuel in the EU and the UK was imported from Asian countries, and there are no signs that this situation will change.
The US is the second largest source of supplies to Europe, with about 15 million tonnes. However, American suppliers do not have the capacity to increase their exports.
The European Union has cancelled exemptions for Russian oil for the Czech Republic. Back in April, Prague announced that it had become completely independent of Russian oil, investing about $70 million in increasing the capacity of the pipeline that originates in Trieste, Italy. Crude oil is exported there by tankers. Over the past four years, Russian oil has accounted for more than 50% of the Czech Republic’s oil imports. After abandoning Russian oil, the Czech Republic will receive hydrocarbons from Norway.
The EU’s decision creates a dangerous situation for the European market. The ban on the supply of Indian petroleum products, which occupy a significant share of the European market, as well as restrictions on the tanker fleet, which is strongly influenced by geopolitical events, may negatively affect the European market and provoke the emergence of new schemes to circumvent sanctions. EU sanctions will ultimately have a negative impact on the European economy, which is gradually losing its competitiveness due to high prices for hydrocarbon raw materials.
