UK loosens Russian oil sanctions as fuel prices climb sharply

The UK government has issued a general trade licence permitting the import and related services for diesel and aviation kerosene refined from Russian-origin crude in third countries, effectively loosening previous restrictions. The licence took effect on May 20, 2026, and is of indefinite duration subject to periodic review.

According to the government notice, the licence includes conditions such as record‑keeping for companies and applies where processing is completed outside the UK. The Home Secretary retains the authority to amend, revoke or suspend the authorisation. A separate, time‑limited licence was also issued to cover maritime transport of liquefied natural gas until January 1 next year.

Market reactions reflect acute supply worries after the effective blockade of the Strait of Hormuz disrupted Gulf shipments, driving up refined fuel costs. Brent crude has traded notably higher in recent sessions as traders price in tighter flows, adding upward pressure to jet and diesel prices that impact airlines and road transport costs.

The move comes in the context of parallel measures by the United States, which has granted or extended waivers to ease shortages for energy‑vulnerable countries while geopolitical tensions around Iran and shipping routes persist. Analysts note the decision navigates a trade‑off between short‑term market stability and the long‑term integrity of sanctions regimes.

Market commentators say the licence could provide targeted relief for immediate logistics and refining bottlenecks, particularly for aviation fuel supplies, but structural constraints — including insurance, payment and vessel clearance issues — may limit uptake. Continued monitoring of price indicators and shipment data will be key to assessing whether the policy delivers sustained easing of fuel costs.