Report warns that the West is funding Putin’s soldiers through increased Russian fuel purchases

Western allies bought roughly $2 billion in fuel made from Russian oil in the first half of 2024, using a sanctions loophole that enables Moscow to pay its soldiers in Ukraine, an upcoming report seen by POLITICO has found. 

The analysis, set to be unveiled jointly on Tuesday by the Center for Research on Energy and Clean Air and the Center for the Study of Democracy, determined that shipments of gasoline, diesel and other products made from Russian crude oil have grown in recent months as a result of imports from just three Turkish refineries.

The imports are technically legal due to a well-known sanctions workaround. While the EU and its Western allies banned nearly all Russian oil imports long ago, countries can still buy fuel of Russian origin if it is first processed in another country, such as Turkey. 

According to the report, Turkey — and the Western firms buying from it — is taking increasing advantage of this so-called refining loophole, despite repeated Ukrainian pleas that it be closed.   

In the first half of 2024 alone, the EU, U.S., U.K. and other Western allies bought around $2 billion worth of fuel made from Russian oil by the trio of Turkish facilities, the report found. Turkey, meanwhile, has cashed in on discounts of from $5 to $20 per barrel from Moscow, stepping up its purchases from Russia annually by 34 percent in 2023 and a colossal 70 percent this year.

“When the EU imports gasoline from Turkey, it is 10 percent cheaper than it would be from Saudi Arabia,” said Vaibhav Raghunandan, an analyst with the Center for Research on Energy and Clean Air. “But those savings aren’t passed on to consumers at all; it’s just companies and traders who benefit. Someone is making a killing from this trade, but it isn’t ordinary people.”

While EU and U.S. policymakers have defended the sanctions arrangement, arguing it deprives Moscow of a “refining premium” on its fuels, the fossil fuel industry remains a lifeline for Russia’s war machine. According to the analysis, the tax revenues collected by Moscow on the fuel sold to Western countries would allow Russia to recruit an additional 6,200 soldiers a month to fight in Ukraine.