Motorists may be inadvertently helping to fund Vladimir Putin's invasion of Ukraine, according to a report that claims Australia is indirectly importing supplies of Russian oil.
The Centre for Research on Energy and Clean Air (CREA), a Finland-based advocacy group, says nations such as Australia and the US are – in spite of bans – continuing to receive Russian oil via refineries on the subcontinent.
Indian imports of Russian crude oil have soared since Moscow launched its invasion of Ukraine in February and CREA said many of those barrels were re-exported as refined products to countries including Australia.
The report comes amid heightened tensions over energy supplies in Europe after Russia all but cut off gas supplies ahead of the northern winter, sending record prices higher still.
Aussie dollars 'flowing to Russia'
Lauri Myllyvirta, CREA's lead analyst and the report's co-author, said there was too little oversight to ensure that Russian oil was not entering Australia.
Mr Myllyvirta says, though indirect, Australia may be helping to prop up the Kremlin while funding what it claims are Russian war crimes against neighbouring Ukraine.
"Our analysis shows that Australia is receiving oil cargoes from Indian refineries who are importing large volumes of Russian crude oil," Mr Myllyvirta said.
"This means Russian oil could be arriving into the Australian market and, by extension, Australian dollars could be funding Russia's invasion into Ukraine.
"Tighter tracking of oil shipments is needed to avoid Russia bypassing oil import bans, and Australia needs to be vigilant about where its fossil fuels are coming from to avoid being complicit in Russia's war crimes."
According to the centre, spending by Indian refineries on Russian oil surged from negligible levels before the invasion to about 7 billion Euros, or more than $10 billion, following the outbreak of war.
Since May, the group says, India has been importing oil worth about 40 million Euros ($58 million) a day.
The report asserted that Russia's windfall gains from elevated fossil fuel prices had amounted to 158 billion Euros ($230 billion) between February and August, more than offsetting the cost of the Ukraine invasion, which it put at 100 billion Euros ($146 billion).
Though India's purchases of Russian crude jumped sharply, the report found the European bloc was still the biggest buyer, shelling out 85 billion Euros ($124 billion) on fossil fuels during the period, followed by China at 35 billion Euros ($51 billion) and Turkey at 11 billion Euros ($16 billion).
'Disappointing' but hard to tackle
Geopolitical analyst James Bowen said it was entirely plausible that Australia could be inadvertently bringing in Russian oil given the opaque and complex nature of international oil trading.
Mr Bowen, a policy fellow at the Perth USAsia Centre, said such a revelation was unlikely to go down well with most Australian motorists, who he believed were strongly against Russia's actions.
However, he also noted that other countries that had bans on Russian oil imports were likely to be in the same boat because it was so difficult to "follow every molecule".
"Any Australian probably wouldn't want to be offering material support to Russia," Mr Bowen said.
"And fossil fuels – oil, coal, gas – are massive sources of Russian revenue.
"So, I think Australians would be disappointed in that.
"But, at the same time … by participating in those international markets and because the price of oil has spiked so much because of Russia's war in Ukraine, we're indirectly supporting Russia's efforts anyway."
Mr Bowen says Russia's belligerence might be delivering the Kremlin short-term financial gains, but the war in Ukraine is likely to cost the country heavily in the long run.
He said this was because many of Russia's most important markets for its fossil fuel experts – such as the European Union – would reduce partly or entirely their dependence on those supplies.
Energy 'potent' political weapon
Despite this, Mr Bowen acknowledged that Europe's reliance on Russian oil and gas gave Mr Putin a huge amount of leverage over the continent in the meantime.
"After the end of the Soviet Empire, Vladimir Putin, once he came to power, actually did deliberately look to position Russia as this energy superpower," he said.
"They obviously have the resource wealth but they also – and Putin in particular – realised that because of the intense dependency that countries have on energy that it can be a really potent political weapon."
Mark McKenzie, the boss of the Australian Convenience and Petroleum Marketers Association, agreed it was possible that Russian oil was getting into Australia.
But Mr McKenzie, whose organisation represents some refined fuel importers along with wholesalers and retailers, says the industry is trying hard to keep out Russian supplies.
He said he understood all importers had redrawn contracts since the invasion to preclude the secondary import of Russian oil or other fuel products.
"Because India is taking on Russian oil, it's possible some of that is flowing inadvertently into our economy," Mr McKenzie said.
"But the businesses are doing everything they reasonably can through commercial agreements to prevent that.
"Short of actually following the molecules, there's nothing practically a business can do from here."
Boost efficiency to cut demand
Mr Bowen said India would likely continue buying up big amounts of Russian oil despite pressure from Western nations led by the US.
He explains that even though India is seemingly growing closer to the West through forums such as the Quad, which also includes Australia, the US and Japan, the rising Asian power has its own national interests.
These were heavily tied up with Russia, which was India's biggest provider of arms as well as other primary products such as fossil fuels.
For Mr Myllyvirta, Australia could help shift the long-term balance of power against Russia by cutting its oil use and, therefore, demand for crude.
"Australia also has one of the highest levels of oil consumption per capita and lacks any vehicle fuel efficiency standards," Mr Myllyvirta said.
"[Australia's] oil import demand helps buoy the Kremlin's revenue by pushing up global prices and demand."
