How Russian oil ends up on the European market – despite sanctions
Since Russia's full-scale invasion of Ukraine in 2022, the West has heavily sanctioned Russian oil to weaken Russia's economic capacity and cripple its war machine. On paper, the West's sanctions were successful: Since 2022, oil transportation directly from Russia to Europe has been reduced from 24% to 4%. In reality, however, the Kremlin finds loopholes to bypass sanctions and keep selling its oil to European markets.
One such loophole leads through Georgia. Investigative journalists from iFact tracked crude oil and petroleum products going from Georgia to EU ports by using data from three global portals, revealing discrepancies with Georgia's official statistics. Belgium, Italy, and Spain reportedly received significant amounts of oil from Georgia, but Georgia's database shows no shipment.
To Spain alone, Georgia allegedly transported 90,000 tons of oil in 2023-2024. Since Russia invaded Ukraine, exports from Georgia to the EU have risen by 1,465% and globally by 440%, while Russia remains a key oil importer for Georgia. Given Georgia's modest oil reserves (it doesn't produce more than 40,000 tons per year), this wild increase is at least questionable.
How does this sanction circumvention work? Ports and oil companies point to ship-to-ship transfers as a common method. A ship leaves port without selling its cargo, and mid-voyage, the owner notifies the captain that the oil has been sold. The oil is then transferred via pipelines to another tanker in neutral waters beyond any country's customs jurisdiction. This practice is widespread in international waters.
In other cases, oil from other countries is rebranded as ”Georgian” before reaching Europe. To sell it as ”Georgian oil” in the EU, the necessary Certificate of Origin (CO) is forged. This can be done by physically mixing oils from different sources or falsifying the origin documents. A railway employee revealed that the transport company can forge the CO.
Georgia is just one part of the Kremlin's puzzling tactic to circumvent the West's sanctions. Türkiye and Central Asian countries play a similar role, providing Russia with much-needed money to fund its war efforts against Ukraine.