UK cuts oil imports from Russia after Ukraine invasion as Norway establishes energy dominance

Imports of Russian oil have tanked this year, following the country’s invasion of Ukraine with traders seeking alternatives amid a flurry of Western sanctions.

Russia fell to the sixth-largest import source for refined oil in April 2022 from its long-established position as the UK’s largest import partner, according to the latest data from the Office for National Statistics in its report on trends in domestic fuel imports and exports.

Prior to the collapse, Russia was one of the top two refined oil suppliers for 48 of the 50 months to April 2022.

The country supplied 24.1 per cent of the UK’s refined oil imports in 2021, but has now been overtaken by United Arab Emirates, the Netherlands, Belgium, Saudi Arabia and India.

Refined oil includes petrol, diesel and heating oil, which have all seen prices spike following the conflict.

The Government has announced plans to phase out Kremlin-backed oil supplies this year after conflict erupted in Ukraine this February, alongside similar measures on Russian coal.

However, the UK still imported about £140m of Russian refined oil in April, two months after the war in Ukraine began.

The statistics also reveal the dominant role Norway has in meeting the UK’s energy needs.

The country was the UK’s main crude oil supplier in 2021, with 49.9 per cent (£8.8bn) of the total crude oil imports coming from Norway, while it also provides around half of the UK’s gas supplies.

Exports of fuels to EU countries have also increased in recent months; exceeding £3bn in a month for the first time in March 2022 (£3.1bn) since records began in 1997.

This further increased in April 2022 to £3.6bn.

Meanwhile, imports of fuels from non-EU countries have seen large increases since mid-2021, driven by increasing gas imports.

In the 12 months to April 2022, imports of fuels from non-EU countries totalled £64.7bn – an increase of £42.6bn (193 per cent) compared with 2021.

The increase in revenues from imports of fuels from non-EU countries has been driven by rising wholesale costs.

Gas prices have remained historically elevated since the end of 2021 amid rising global gas demand, the easing of coronavirus pandemic restrictions, capacity issues, lower domestic renewable energy production and higher gas demand in Asia.

The UK imports around 50 per cent of its gas from the international market, with Norway its largest supplier, while it produces around a third of its energy needs domestically.

Meanwhile, trade in liquefied natural gas (LNG) has become increasingly important to the UK in late 2021 and early 2022.

In 2022, the UK has sourced its LNG from 12 different countries – with US its the largest source of LNG, followed by Qatar, Peru, Angola and Russia.

ONS noted that the UK has relatively little capacity to store gas compared with European counterparts, because of the closure of the Rough gas storage facility in 2017 – which Centrica has just applied to re-open.

The UK instead re-exports imported LNG, through pipelines to Belgium, Ireland and the Netherlands – as Europe braces for a difficult winter characterised by supply shocks from Russia.