London makes an exception for Russian oil - and Deutsche Bank pays a £165,000 fine

Just last October, the United Kingdom had hardened its position. Russian raw materials were no longer supposed to enter Western markets through indirect routes. Products made from Russian oil in third countries were supposed to stay out. The message was clear. If you impose sanctions, you cannot leave side doors open. Now London is opening one itself. The British Department for Business and Trade has issued an unlimited general license allowing the import of aviation fuel and diesel fuel, provided those products are manufactured in third countries from Russian crude oil. The regulation is set to take effect on May 20, 2026. It will remain valid until a minister revokes or amends it. The affected products include diesel fuels under two commodity codes and aviation kerosene. Not only the imports themselves are permitted. Related services such as transportation, financing, and additional services also fall under the exemption. Companies are required to maintain corresponding documentation and records.

On paper, these are not Russian products. That is exactly the point. The crude oil originates in Russia but is processed, for example, in India or Turkey and later resold without any obvious Russian origin. Russian raw material suddenly becomes the product of a third country after passing through refineries. London itself had described exactly this process just a few months ago as a method of circumventing sanctions and had prohibited it. That earlier decision followed a similar move by the European Union as part of its 18th sanctions package.

Steel frameworks, distillation towers, storage tanks, cranes operating nonstop. It is the construction of an oil refinery complex. According to the company’s own presentation, Black Sea Petroleum LLC was founded in 2022 with the goal of building and later operating the refinery in Kulevi, Georgia. The photographs document construction progress: foundation work, assembly of steel structures, installation of process units, large storage facilities, as well as maritime infrastructure. This suggests that the project includes not only a classic refinery but also storage and transshipment capacity - strategically significant on the Black Sea coast.

Read also our article: The Route in the Shadows - How Russia Is Shifting Its Oil and the Risks Are Growing

Investigations show: When Russian oil becomes "Georgian" and ends up in the EU - The Kulevi case

At the time, Home Secretary Yvette Cooper stated that the United Kingdom was increasing pressure on Vladimir Putin and targeting oil, gas, and the so called shadow fleet. The statement sounded like a hard line approach. The new license now creates an exception to that same ban for two of the most important categories of fuel.

The timing does not appear coincidental given the current tensions in energy markets. The war with Iran and the closure of the Strait of Hormuz have significantly worsened the situation. According to estimates by Goldman Sachs, the United Kingdom is currently considered the most vulnerable country in Europe. Aviation fuel reserves are said to have fallen to critically low levels. At the same time, the closure of Scotland's Grangemouth refinery in April 2025 significantly reduced domestic processing capacity.

Analysts expect European aviation fuel reserves to fall below the critical threshold of 23 days as early as June, a level established by the International Energy Agency. Since the beginning of the Middle East conflict on February 28, aviation kerosene prices have doubled. Airlines have already removed approximately two million seats from their May schedules.

£165,000 fine

Almost simultaneously, it became public that the United Kingdom had imposed a £165,000 fine on Deutsche Bank's London branch. The issue involved two transfers made in 2022 for the benefit of the Russian streaming service Okko. The service was owned by the sanctioned company AO New Opportunities.

Deutsche Bank had already reported the payments itself to the British sanctions authority in September 2022. As a result, the originally proposed £300,000 penalty was reduced by 45 percent. Representatives of the bank have since stated that all areas of sanctions monitoring and related procedures had been further strengthened. Back in April, Deutsche Welle had reported that a banking division allegedly accepted larger deposits from Russian citizens and residents despite existing sanctions. The amounts involved exceeded €100,000. The bank had also reported those incidents to German financial regulators itself.

While sanctions are officially being tightened further and banks receive penalties for individual violations, the same government is simultaneously allowing imports of fuel products whose existence would not even be possible without Russian oil. Along the way, the oil changes only names, documents, and stated origins. Its actual origin remains exactly the same.