KSE Institute has published “Assessing the Closure of the EU’s Refining Loophole,” an analysis of whether the EU’s ban on petroleum products refined from Russian crude oil in third countries has stopped their imports into the European Union.

The prohibition, which took effect on January 21, 2026, is designed to close the so-called “refining loophole” through which Russian crude oil could indirectly reach sanctions coalition markets in the form of petroleum products after being refined in third countries. KSE Institute examined 11 refineries in India, Turkey, Brunei, and Georgia that had exported products derived from Russian crude oil to the EU and other coalition countries in the past.

The analysis shows that the ban has substantially reduced flows of such products to the EU. However, some imports remain and require further investigation. Importantly, products linked to Russian crude continue to reach other sanctions coalition markets that have not introduced comprehensive bans – notably the United States and Australia.

Key findings:

EU imports dropped sharply, but some risks remain. Total imports of these products from the 11 refineries fell by 69% – or 120 kb/d – in February-April 2026 compared with the second half of 2025. However, around 50 kb/d still originate from refineries without clearly identifiable separate refining capacity for Russian and non-Russian crude oil – primarily Tüpraş İzmit, STAR, and Kulevi. These flows raise potential sanctions-compliance concerns.

The ban may also have affected the refineries’ overall use of Russian crude oil. In February-April 2026, their imports of Russian crude declined by 28%, and their exports of products estimated to be derived from it by 45%. In absolute terms, exports of such products fell by 324 kb/d, of which 120 kb/d are accounted for by lower shipments to the EU. The effect of the EU ban specifically, however, is difficult to disentangle from other factors – most notably US sanctions on Russian oil producers and pressure on importers.

Indian refineries redirected almost all products derived from Russian crude to other markets. Their exports of such products to the EU declined by 97%, and 98% of exports estimated to be derived from Russian oil went to markets outside the EU. At the same time, many Indian refineries – including the world’s largest in Jamnagar – retain the ability to export to the EU thanks to separate crude distillation units.

Turkish refineries responded differently. Tüpraş İzmir completely stopped importing Russian seaborne crude oil, and STAR significantly reduced its dependence on it. Tüpraş İzmit, by contrast, increased both its Russian crude intake and its exports of products derived from Russian crude – including to the EU. These continued exports require additional analysis from a sanctions-compliance perspective.

The EU ban had little effect on refineries in Brunei and Georgia. Hengyi in Brunei continued importing Russian crude and exporting mainly to Asia-Pacific markets. Kulevi in Georgia runs entirely on Russian feedstock; its growing exports went largely to alternative destinations, but some shipments still reached the EU. For a refinery with a single crude distillation unit, this may point to issues with the documentation of products’ non-Russian origin.

The study also points to gaps in the sanctions coalition’s approach to products refined from Russian crude. The United Kingdom did not import any such products from the 11 refineries covered. The United States and Australia, however, continued to receive products derived from Russian crude: the US primarily from Turkish refineries, while Australia became a more important market for Indian refineries and remained the primary coalition destination for Hengyi in Brunei.

Overall, the EU ban has substantially reduced the European market’s role as a destination for petroleum products linked to Russian crude oil. Its impact on refineries’ overall behavior is less clear, given other factors – particularly US sanctions. Continued exports of such products to the EU from refineries without separate refining capacity warrant further monitoring.