Sanctions lock out cheap Russian fuel

The Philippines is not asking where it could find crude oil but whether we could buy it at all without crossing Washington.

In a crisis shaped by disruption in Hormuz, the cheapest barrels sit behind sanctions: Russian crude tempts on cost but threatens access to finance and shipping.

The compliant ones from the Americas arrive slower and cost more. That leaves Manila choosing between speed, price, risk; never all three.

The US began tightening sanctions on Russian energy since the Russian invasion of Ukraine, with major measures rolled out in 2022 and expanded since.

According to reports, Russia is trying to disguise it as fuel from other countries.

The fuel itself is usable, except banks won’t process payments for fear of sanctions, insurers may refuse to cover the cargo and, without insurance, ships cannot dock at most ports or enter key canals, risking being stranded at sea.

For potential buyers like the Philippines, heavily dependent on imported fuel, the bargain is stark: pay more for safe supply, or risk penalties and diplomatic fallout for cheaper energy?

Elsewhere, the workaround is already visible. Indonesia is attempting it in the open. President Prabowo Subianto arrived in Moscow this week not to signal a shift in allegiance but to solve a pricing problem.

Indonesia is seeking discounted Russian supply despite tightening sanctions and uncertain delivery.

The overlap with defense talks in Washington is the point: Jakarta is hedging in plain sight: Non-alignment as procurement strategy, one that buys time, manages inflation, tests how far a middle power can stretch between markets, rules and immediate need.

If the cheapest oil is the one we can’t afford to touch, what, exactly, does our proud sovereignty buy us?