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IPFS News Link • Oil

The Lukoil Loophole: How Russian Oil Sidesteps Sanctions To End Up In The US

•, by Mike Shedlock

The Wall Street Journal has an interesting video that describes How Russian Crude Avoids Sanctions and Ends Up in the US.

With an upfront ad, that is a free WSJ video link.

Sanction Avoidance Process 

US sanctions are on crude oil, not refined products.

Lukoil, Russia's second largest oil and gas company was not sanctioned by the US.

Lukoil's refinery in Sicily is the second largest in Italy and fifth largest in Europe.

A Lukoil refinery in Italy once processed crude from multiple countries. Now it inputs are 93 percent from Russia. 

After refining, the country of origin is Italy, not Russia. This is due to longstanding practice of changing the country of origin to where oil is refined. 

The refined product then makes its way Exxon and Lukoil plants in New Jersey and Texas. 

Lukoil still has a gas station presence in the US and it distributes products to eleven states. 

Note: Most of the 230 Lukoil gas stations in the US are owned by individual American franchisees, not the oil giant itself.