The UK will phase out imports of Russian oil in response to Vladimir Putin’s illegal invasion of Ukraine by the end of the year, the Business Secretary Kwasi Kwarteng has confirmed today (Tuesday 8 March).

The phasing out of imports will not be immediate, but instead allows the UK more than enough time to adjust supply chains, supporting industry and consumers. The government will work with companies through a new Taskforce on Oil to support them to make use of this period in finding alternative supplies.

The UK is working closely with the US, the EU and other partners to end our dependence on Russian hydrocarbons in response to Russian aggression in Ukraine, recognising the different circumstances and transition timelines.

The import of Russian oil makes up 44% of Russian exports and 17% of federal government revenue through taxation – this move steps up the international pressure on Russia’s economy.

In a competitive global market for oil and petroleum products, demand can be met by alternative suppliers. We will work closely with international partners to ensure alternative supplies of fuel products.

Russian imports account for 8% of total UK oil demand, but the UK is also a significant producer of both crude oil and petroleum products, in addition to imports from a diverse range of reliable suppliers beyond Russia including the Netherlands, Saudi Arabia, and USA.

Whilst this transition takes place, the government recognises the need to continue to import Russia oil in the meantime as we work to this aim. This will help ensure continuity in our supply and protect consumers.

Prime Minister Boris Johnson said:

In another economic blow to the Putin regime following their illegal invasion of Ukraine, the UK will move away from dependence on Russian oil throughout this year, building on our severe package of international economic sanctions.

Working with industry, we are confident that this can be achieved over the course of the year, providing enough time for companies to adjust and ensuring consumers are protected.

Business and Energy Secretary Kwasi Kwarteng said:

Unprovoked military aggression will not pay and we will continue to support the brave people of Ukraine as they stand up to tyranny, building on our existing sanctions that are already crippling Putin’s war machine.

We have more than enough time for the market and our supply chains to adjust to these essential changes. Businesses should use this year to ensure a smooth transition so that consumers will not be affected.

This significant move will increase the growing pressure on Russia’s economy by choking off a valuable source of income and hitting its ability to impose further misery on the Ukrainian people.

The elimination of oil imports is in addition to existing trade, financial and personal sanctions already imposed by the UK against Putin’s regime and those who support him in his war against Ukraine.

Russian oil is already being ostracised by the market, with nearly 70% of Russian oil currently struggling to find a buyer, and in a competitive global market demand will quickly be met by alternative suppliers. On 1 March Russian ships were banned from UK ports and authorities were granted new powers to detain Russian vessels.

The UK is not dependent on Russian natural gas, making up less than 4% of our supply. Ministers are also exploring options to reduce this further. The Prime Minister confirmed that the government will set out an energy strategy to set out the UK’s long term plans for greater energy security, including both renewable and domestic oil and gas supplies.

1. The UK benefits from significant domestic production of oil and gas. More than two-thirds of our road fuel comes from domestic production.

2. Russian oil is already being ostracised by the market, with nearly 70% of Russian oil currently struggling to find a buyer, and in a competitive global market demand will quickly be met by alternative suppliers.

3. Russia produces only a fraction of the fuel products currently imported to the UK, with the vast majority coming from reliable suppliers like the USA, Netherlands, Sweden, Belgium and Saudi Arabia.

4. Russian oil imports as a percentage of total demand (DUKES 2020):

• Petrol, 0%
• Jet fuel, 5%
• Heating oil, 0%
• Diesel, 18%
• Gas oil (such as red diesel), 1%
• Fuel oil, 0%
• All oil imports, 8%

Chair,

France, Germany and the United Kingdom would like to thank Director General Grossi for his latest report contained in GOV/2022/4 and Deputy Director General Aparo for his Technical Briefing. We commend the Agency for its reporting, despite the limitations placed on its activities in Iran, and support its independence.

We note with concern that, since the last Board of Governors in November, Iran has continued to advance its nuclear programme by developing its stockpile of enriched uranium and conducting activities that provide permanent and irreversible knowledge gains. Iran’s nuclear programme has never before been this advanced, and is exposing the international community to unprecedented levels of risk.

In particular, Iran has nearly doubled its stockpile of Highly Enriched Uranium since the last Board and has begun to convert this material into Highly Enriched Uranium targets over the last two weeks.

Iran has also continued to stockpile 20% enriched uranium, and since the last Board, has begun to operate a cascade of advanced IR-6 centrifuges to do so at the underground Fordow facility. Iran has no plausible civilian justification for 20% and 60% enrichment and the production of Highly Enriched Uranium is unprecedented for a State without a weapons programme. Accumulation of uranium enriched at 20% and 60% is further reducing the time Iran would take to break out towards a first nuclear weapon. Iran’s R&D on, and extensive use of, advanced centrifuges have permanently improved its enrichment capabilities. This means that Iran’s continued escalations are irreversibly reducing the non-proliferation value of the JCPoA.

The IAEA has also been without crucial access to data on centrifuge and component manufacturing for over a year since Iran stopped implementing verification and monitoring arrangements agreed in the JCPoA, and suspended implementation of the Additional Protocol. The Agency reports that verification and monitoring activities have been seriously affected as a result of Iran’s decision to stop the implementation of its nuclear-related commitments under the JCPoA.

The E3/EU+3 have been engaged in intensive negotiations with Iran for eleven months. We are now very close to finalising a deal that would address our most pressing and immediate non-proliferation concerns, returning Iran’s nuclear programme to JCPoA limits as well as restoring JCPoA transparency measures and Iran’s implementation of the Additional Protocol. The rate of advances in Iran’s nuclear programme means this deal cannot remain on the table indefinitely. The window of opportunity is closing. We call on all sides to make the decisions necessary to close this deal now, and on Russia not to add extraneous conditions to its conclusion.

We strongly urge Iran to avoid undertaking any new escalations and in particular, call upon Iran to immediately cease all activity related to conversion of Highly Enriched Uranium, which will have practical implications for returning to JCPoA limits. We urge Iran to prepare to take steps towards reimplementation of the JCPoA, including by: firstly, ceasing the production of high enriched uranium and any enrichment above JCPoA limits; secondly, preparing to dispose of its stockpile of enriched uranium in excess of JCPoA limits; thirdly, returning enrichment capacities and R&D to agreed limits; fourthly, stopping all activities related to the production of uranium metal; and fifthly, restoring full transparency and cooperation with the IAEA.

We reiterate that Iran must cooperate with the IAEA and enable the Agency to restore continuity of knowledge over its nuclear programme, enhancing the Agency’s ability to resume verification and monitoring, and provide full and effective assurance to the international community over the peaceful nature of Iran’s programme. We commend the IAEA for its objective reporting, and its rigorous and impartial implementation of the mandate conferred on it by the United Nations Security Council, and we encourage the Director General to keep the Board informed regarding progress on monitoring and verification in Iran in all its aspects. We would welcome the Agency’s latest quarterly report on monitoring and verification in Iran be made public.

Thank you Chair.