Australians may not notice anything unusual when the oil tanker Proteus Bohemia docks at Botany Bay later this month, carrying 78,000 tonnes of petrol. The vessel, operated by Shell and flying the Singapore flag, appears ordinary. However, its cargo is embroiled in controversy, as nearly half of it originates from Russian crude, indirectly supporting the Russian government’s war efforts in Ukraine.
This revelation challenges the official stance of the International Energy Agency, which claims that Australia does not import Russian oil. Yet, the reality is more complex. The oil aboard the Proteus Bohemia was refined in India from Russian crude, highlighting a loophole in the global sanctions aimed at curbing Russia’s oil revenue.
The Global Sanctions Landscape
The international community, including some of Australia’s closest allies, has intensified sanctions against Russia to cut off funding for its military operations. The United States, under President Donald Trump, recently heightened sanctions on major Russian oil exporters Rosneft and Lukoil, and imposed tariffs on India for processing Russian crude. Similarly, the European Union has sanctioned these companies, though it faces challenges with member states like Hungary and Slovakia continuing to import Russian oil via pipelines.
The United Kingdom has also taken steps to block Russian oil, with Prime Minister Keir Starmer declaring on October 25,
“We will act to take Russian oil and gas off the global market. We’re choking off funding for Russia’s war machine.”
This statement serves as a call to action for allies, including Australia, to consider similar measures.
Australia’s Position and the Indian Connection
Despite these global efforts, Australia continues to receive oil refined from Russian crude. The Proteus Bohemia was loaded at India’s Jamnagar refinery, a major hub for processing Russian oil. According to the Centre for Research on Energy and Clean Air (CREA), 47% of the crude processed at Jamnagar from January to October was sourced from Russia. This refinery, owned by Reliance Industries, has a long-term supply agreement with Rosneft, complicating efforts to shift away from Russian oil.
CREA analyst Vaibhav Raghunandan notes,
“Australian imports of oil products refined from Russian crude have surged by 10% in the first nine months of this year.”
This trend positions Australia as an outlier compared to other Western nations actively reducing their reliance on Russian energy.
Tracing the Financial Trail
The economic incentives for continuing this trade are significant. Russian oil, due to sanctions, is cheaper, allowing Indian refineries to offer competitive prices. CREA estimates that Australian companies have saved approximately $64.3 million by importing diesel from India, which is priced about 4% lower than similar products from South Korea. However, this cost-saving comes at a moral price, as it indirectly funds Russia’s military activities.
Mark Corrigan, an Australian chemical engineer, emphasizes the ethical implications, stating,
“There is a clear financial trail from Australian bowsers back to the Kremlin. While continuing to trade through these supply points, Australian oil importers remain complicit in Russia’s criminal behaviour in Ukraine.”
Australia’s Response and Future Steps
Australia has implemented measures since the onset of the Ukraine conflict, including cutting direct purchases of Russian oil and sanctioning vessels involved in its transport. However, the oil industry has adapted, and the Australian government is now evaluating additional sanctions.
Foreign Minister Penny Wong has urged oil companies to scrutinize their supply chains, asserting,
“Australians do expect their businesses to ensure that their supply chains don’t inadvertently fund Russia’s illegal and immoral invasion of Ukraine.”
Meanwhile, the Department of Foreign Affairs is considering further actions to limit Russia’s oil revenues.
Despite these challenges, the potential for change exists. Raghunandan suggests that Australia could eliminate its reliance on Russian oil by banning imports from specific refineries like Jamnagar. This move, he argues, would not significantly impact fuel prices, as South Korea remains Australia’s largest oil supplier and does not use Russian crude.
The Ethical and Economic Debate
Ultimately, the issue transcends economics, touching on ethics and Australia’s role in the global effort to counter Russian aggression. Kateryna Argyrou, chair of the Australian Federation of Ukrainian Organisations, underscores the gravity of the situation, stating,
“Every drop of this oil prolongs the suffering of innocent Ukrainians. And every dollar we send to the Kremlin enables the funding of weapons that destroy Ukrainian homes and lives.”
The Australian government faces a critical decision: continue benefiting from cheaper oil or align more closely with its allies by taking a stand against Russian aggression. As the debate unfolds, the implications for Australia’s foreign policy and ethical standing remain profound.
