The EU's ban on petroleum products refined from Russian crude oil in third countries has sharply reduced the flow of Russian-linked fuel into Europe, but significant loopholes remain and products derived from Russian oil continue to reach other Western markets, according to a new analysis by the Kyiv School of Economics (KSE) Institute.

The prohibition, which came into force on January 21, 2026, was designed to close what policymakers termed the "refining loophole" — a route that allowed Russian crude oil to enter sanctions coalition markets indirectly after being processed at refineries outside Russia.

The measure represented one of the most significant tightening steps in the West's sanctions regime since the introduction of the G7 oil price cap in late 2022. While direct imports of Russian crude and petroleum products into the EU had already been largely prohibited, refiners in countries such as India and Turkey continued purchasing Russian oil, processing it and exporting the resulting products to Europe, letting Russian oil into the EU via the backdoor.

KSE examined 11 refineries in India, Turkey, Brunei and Georgia that had previously exported products derived from Russian crude to the EU and other sanctions coalition countries.

The report concludes that the ban has had a substantial impact on European imports. Total EU imports from the 11 refineries fell by 69%, or around 120,000 barrels per day (kb/d), during February-April 2026 compared with the second half of 2025.

However, researchers found that approximately 50 kb/d of remaining imports continue to originate from refineries that do not appear to have clearly identifiable separate refining capacity for Russian and non-Russian crude oil. The report identifies Turkey's Tüpraş İzmit refinery, STAR refinery and Georgia's Kulevi facility as the principal sources of concern.

These continuing flows "raise potential sanctions-compliance concerns" and warrant additional investigation, the report said.

The findings suggest that the ban may also be influencing refinery purchasing decisions beyond Europe. Combined imports of Russian crude by the 11 facilities declined by 28% in February-April compared with the second half of 2025, while exports of products estimated to be derived from Russian oil fell by 45%.

In absolute terms, exports of Russian-linked petroleum products declined by 324 kb/d, although researchers caution that isolating the specific impact of the EU ban is difficult. US sanctions imposed on Russian oil producers earlier this year and broader pressure on importers to reduce purchases likely played an important role as well.

India appears to have adapted most rapidly. Exports of petroleum products derived from Russian crude from Indian refineries to the EU plunged by 97% after the ban took effect. According to the report, 98% of such exports were redirected to non-EU destinations.

Yet Indian refiners have not abandoned access to the European market entirely. Many facilities, including the world's largest refinery complex at Jamnagar operated by Reliance Industries (RELIANCE), maintain separate crude distillation units that allow them to process Russian and non-Russian oil streams independently, preserving their eligibility to export to Europe.

Turkey's response was more mixed. Tüpraş İzmir halted imports of Russian seaborne crude altogether, while STAR significantly reduced its dependence. By contrast, Tüpraş İzmit increased both imports of Russian crude and exports of products derived from Russian oil, including shipments to the EU.

"These continued exports require additional analysis from a sanctions-compliance perspective," the report said.

Outside Europe, the picture is even less clear. The study found that refineries in Brunei and Georgia were largely unaffected by the new rules. Hengyi in Brunei continued importing Russian crude and exporting primarily to Asia-Pacific markets, while Kulevi became fully reliant on Russian feedstock.

The report also highlights broader weaknesses in the sanctions coalition's approach. While the UK imported no Russian-linked petroleum products from the refineries examined, products derived from Russian crude continued to reach other coalition members.

The US remained a destination for products exported from Turkish refineries, while Australia emerged as an increasingly important market for Indian refiners and remained the principal coalition-country destination for exports from Hengyi in Brunei.

The findings underscore the challenge facing Western governments more than four years after Russia's invasion of Ukraine. While successive rounds of sanctions have significantly reduced Moscow's direct access to European energy markets, global oil trading networks have proved highly adaptable.

The KSE study concludes that the EU's latest measures have substantially reduced Europe's role as a destination for petroleum products linked to Russian crude. Whether the ban will ultimately alter refinery behaviour more broadly remains uncertain, particularly as US sanctions and changing market conditions continue to reshape global oil flows.

For now, the report suggests that Europe has largely succeeded in closing one of the most visible loopholes in its sanctions regime, even as Russian oil continues to find indirect routes into other parts of the global economy.

Beyond India, where a large amount of Russian crude is headed, the report found that the impact of the EU ban varied considerably across Turkey, Brunei and Georgia, reflecting differences in refinery configurations, export markets and dependence on Russian crude.

India:
India accounted for the most dramatic adjustment following the closure of the refining loophole. Exports of petroleum products derived from Russian crude from Indian refineries to the EU fell by 97% after the ban took effect, with 98% of such exports redirected to markets outside Europe. The shift was particularly significant because India has become one of the largest buyers of discounted Russian crude since 2022. However, KSE notes that many Indian refineries, including the world's largest refining complex at Jamnagar, retain separate crude distillation units that allow Russian and non-Russian feedstocks to be processed independently, preserving their ability to continue exporting products to Europe. The report suggests that a 28% decline in Russian crude imports by Indian refiners was likely driven as much by recent US sanctions on Russian producers as by the EU ban itself.

Turkey:
Turkey emerged as the most important remaining conduit for Russian-linked petroleum products into sanctions coalition markets, but refinery behaviour varied sharply. Tüpraş's İzmir refinery stopped importing Russian seaborne crude altogether, while the STAR refinery significantly reduced its dependence on Russian feedstock. By contrast, the Tüpraş İzmit refinery increased both its intake of Russian crude and its exports of products derived from Russian oil, including shipments to the EU. KSE identifies İzmit as one of the main sources of continuing sanctions-compliance concerns because it lacks clearly identifiable separate refining capacity for Russian and non-Russian crude streams. The report suggests Turkish refiners have adopted different adaptation strategies in response to sanctions, with some moving away from Russian oil while others continue to exploit opportunities created by price discounts and shifting trade flows.

Brunei:
The EU ban had little direct impact on Brunei's Hengyi refinery, which continued importing Russian crude and exporting refined products primarily to Asia-Pacific markets. Because Hengyi's sales were already concentrated outside Europe, the closure of the EU's refining loophole did little to alter its operating model. However, the report highlights that petroleum products derived from Russian crude continued reaching sanctions coalition countries through Brunei, particularly Australia, which remained Hengyi's principal coalition-market destination. The findings illustrate how Russian oil can still indirectly enter Western-aligned markets even after Europe tightened its sanctions regime.

Georgia:
Georgia's Kulevi refinery was among the least affected by the EU ban and became fully reliant on Russian crude feedstock during the period examined. Although most of its growing exports were redirected to non-EU destinations, some shipments continued to reach European markets despite the refinery operating with a single crude distillation unit. KSE notes that, because Kulevi lacks separate processing capacity for Russian and non-Russian oil, these exports raise questions about the documentation and certification of products claimed to be of non-Russian origin. The report identifies Kulevi as one of the facilities warranting closer scrutiny from sanctions authorities due to potential compliance risks.