Register for free and continue reading
Join our growing army of changemakers and get unlimited access to our premium content
Oil accounts for 44% of Russia's exports
The Department for Business, Energy and Industrial Strategy (BEIS) said in a statement that the phase-out will “allow the UK more than enough time to adjust supply chains” but will also “step up the international pressure on Russia’s economy. The UK has already banned Russian ships from UK ports.
Russia is the world’s third-largest oil producer and exporter, beyond only the US and Saudi Arabia. Oil accounts for 44% of all Russian exports, generating 17% of the Russian federal government’s annual revenues. Yet, because of Russia’s invasion of Ukraine, its export markets are fast dwindling.
Of the amount of oil consumed in the UK annually, 8% is accounted for by Russian imports, according to BEIS. Businesses using imported oil in the UK are being advised to “use this year to ensure a smooth transition”.
Tweeting about the news, BEIS Secretary Kwasi Kwarteng wrote: “The UK is a significant producer of oil and oil products, plus we hold significant reserves.
“Beyond Russia, the vast majority of out imports come from reliable partners such as the US, the Netherlands and the Gulf. We’ll work with them this year to secure further supplies.
“While the UK is not dependent on Russian natural gas – 4% of our supply – I am exploring options to end this altogether.”
Prime Minister Boris Johnson confirmed on Monday (7 March) that the UK Government will publish a new energy supply strategy before the end of the week. Johnson has hinted that the strategy will, unlike the EU’s plans, include an increase in domestic fossil fuel production.
This has disappointed many climate and energy experts who have pointed out that, as gas is a globally traded commodity, increased domestic production will likely only bring minor benefits in terms of reduced energy bills for British customers. The Government’s own advisory body, the Climate Change Committee (CCC), issued this warning less than a fortnight ago.
The UK is not the only major economy to announce fresh measures to end Russian fossil fuel imports. Earlier today (8 March), the European Commission outlined plans to accelerate some of the EU’s plans on renewables and gas storage, with the ultimate aim of becoming independent from Russian imports “well before” 2030. These plans have been called ‘REPowerEU’. They will shortly be put to the bloc’s Member States at a meeting in Versailles.
Elsewhere, US President Joe Biden has today announced a ban on all Russian energy imports, starting with oil, which will be phased out in 2022.
Thankful for US and @POTUS personal leadership in striking in the heart of Putin’s war machine and banning oil, gas and coal from US market. Encourage other countries and leaders to follow.
— Володимир Зеленський (@ZelenskyyUa) March 8, 2022
BEIS has stated that 70% of Russian oil is set to struggle to find an international buyer this year.
Green economy reaction
The BEIS Committee is notably conducting an inquiry into how the UK can bolster energy security. The Committee’s chair, Darren Jones MP, said the publication of the full strategy promised by Johnson is a matter of “urgency”. He also urged Johnson to work with the Treasury to ensure that the plan receives adequate financial support through this year’s Spring Budget.
Elsewhere, green groups are urging Kwarteng’s department to build on the announcement with more detail on renewable energy, energy storage and energy efficiency.
The Energy and Climate Change Intelligence Unit is urging the UK to follow the EU’s lead, and plan “for accelerated renewables, heat pump and efficiency roll out”. The Unit’s deputy director Sepi Golzari-Munto said: “The overarching message cannot be clearer: net-zero is now synonymous with energy security and national interest.”
The REA’s director of external affairs, Amy MacConnachie, said:
“We welcome the Government’s ban on Russian oil imports and hope similar action on gas quickly follows. The UK should not be helping to inadvertently fund the invasion of Ukraine and we stand in solidarity with the Ukrainian people.
“Although only accounting for a relatively small amount of the UK’s oil and gas supplies, we know that the Government will need to take significant action to replace any shortfall. However, it is crucial that the Government looks to accelerate the deployment of renewables for its homegrown energy, rather than regressively binding the UK to more fossil fuels.
“That means boosting home insulation, replacing gas boilers with green alternatives, and ramping up the installation of renewables and cleantech, both domestically and at a utility-scale. Our sector stands ready to deliver an energy future which is independent, secure, and stable.”
Sarah George
Considering that oil is a commodity traded on the world market and in over-supply for years, the only reason for refiners (not government, surely) to buy from Russia would be a good price offer.