Funding Putin: ‘Blood Oil’ Imports from Major Asian Supplier Surge

A recent report by the Centre for Research on Energy and Clean Air has revealed that Australia is inadvertently financing Vladimir Putin’s war on Ukraine through imports of “blood oil” from Brunei’s Hengyi refinery. The numbers are stark – 68 per cent of the oil exported to Australia from this key Asian refinery in the first seven months of the year was Russian-derived, up from 24 per cent two years ago.

Prime Minister Anthony Albanese secured fuel supplies for Australia during his visit to Brunei in April, but it’s clear that the government is more concerned with maintaining access to cheap energy than with standing by its values. Australian motorists are unknowingly filling their cars with fuel that provides a financial lifeline to Russia’s war effort, raising serious questions about the country’s moral compass.

The loophole allowing Russian crude oil to enter Australia after being refined in third countries is a gaping hole in our sanctions regime. The Department of Foreign Affairs and Trade has issued guidance warning importers they could be breaching Australian sanctions law, but this offers little comfort to the Ukrainian-Australian community, who are urging the government to impose a total ban on all petroleum products derived from Russian crude.

Australia is Hengyi’s biggest destination country, accounting for 43 per cent of its oil-product export volume. The refinery’s reliance on Russian crude has skyrocketed in recent years – it now stands at an all-time high of 88 per cent between April and June this year.

As the world grapples with the consequences of Russia’s invasion of Ukraine, Australia’s actions are being scrutinized by international partners. Energy Minister Chris Bowen’s upcoming meeting with his Saudi counterpart is likely to be tense, given concerns over global energy shortfalls linked to the war in Iran. Meanwhile, US President Donald Trump has signed a bill directing him to impose up to 100 per cent tariffs on the top importers of Russian oil or natural gas – a stark contrast to Australia’s lack of action.

The Australian Federation of Ukrainian Organisations has described the country’s failure to take action as “risks turning the country into a dumping ground for blood oil that is illegal in comparable jurisdictions”. This is not just a matter of sanctions law – it’s about our very values as a nation. As CREA analyst Isaac Levi noted, “If Australia is truly an ally of Ukraine, it cannot arm Ukraine with one hand while financing Putin’s war with the other.”

In this context, it’s not just about closing the loophole or imposing stricter sanctions – it’s about taking responsibility for our actions. We can no longer afford to turn a blind eye to the consequences of our energy choices. The time has come for Australia to stand up and be counted – to prioritize its values over cheap energy and join the global effort to cripple Russia’s war machine.

As we watch events unfold at the United Nations General Assembly this week, one thing is clear: Australia’s inaction on “blood oil” imports will not go unnoticed. The world is watching – and waiting for us to do the right thing.