Russia uses Indian and Chinese tankers and violates “price ceiling” sanctions

Western reports on Monday expected Russia to achieve higher revenues from oil exports this year despite higher price ceilings imposed on it by the Group of Seven and the European Union in response to its invasion of Ukraine.

An analysis of shipping data cited by the Financial Times today shows that Russia now ships three-quarters of its oil abroad without Western insurance, one of the tools used by the G7 and the EU to impose a cap above $60 a barrel. .

Prices are rising, the report says, and Russian crude oil is no exception. Urals crude is currently trading at approximately $79 per barrel, while Aspo crude, a Far East blend, is trading at more than $88 per barrel.

This spring, the Financial Times cited data from the US firm Kpler which noted that Russia transports half of its oil exports without Western insurance, indicating that “Moscow has become more adept at avoiding price ceiling sanctions imposed by the G7”. on energy.

These high prices for Russian raw materials come amid repeated assurances from the US Treasury that the maximum price ceiling “worked as intended”.

US Treasury Undersecretary Wally Adeyemo said last June: “In just six months, the maximum price ceiling for Russian raw materials has contributed to a significant decline in Russian revenues, and contributed to a major turning point in the war.”

Last August, US Assistant Secretary for Economic Policy Eric Van Nostrand said he was “confident that the price ceiling achieves the dual goals of curbing Russian revenues and helping to stabilize energy markets.”

The Financial Times newspaper cited the Kiev School of Economics as estimating that this year, Russia’s revenue from oil exports will rise by $15 billion due to the breach of price ceilings set by the Group of Seven and the European Union.

Critics of the price ceiling have argued from the outset that implementing it would be challenging for Western countries and relatively easy for Russian companies to avoid.

In fact, Russian, Chinese, and Indian insurance companies intervened in the transport of Russian oil instead of large Western insurance companies, and what the media called the “dark fleet” tankers were built to ship Russian crude around the world without the participation of Western companies.

But despite all this, the sanctions regime has had a significant impact since the Russian invasion of Ukraine, which Western reports estimate will cost Russia $100 billion in oil exports from February 2022, but the problems facing the oil industry in Russia are simply beyond that. Challenges Exports Domestic shortages of diesel fuel have forced the Kremlin to restrict fuel exports from the country.