Russia still relies on Europe for its oil supplies, despite the violation of price restrictions set by the G7 countries.
This is reported by Bloomberg.
According to the Centre for Research on Energy and Clean Air in Helsinki (CREA), approximately two-thirds of Russia's crude oil and petroleum products are transported on ships that are insured or owned by states that must comply with the price ceiling set by the G7.
The restriction was designed to keep enough oil flowing into the world while reducing the Kremlin's revenue. The CREA says that Russia, while continuing to use Western vessels, has assembled a so-called shadow fleet of tankers operating outside the jurisdiction of the countries that have imposed sanctions.
They tend to transport oil over shorter distances, where the same amount of capacity can move more stock.
“More than by the use of ‘shadow’ tankers, the impact of the oil price cap has been undermined by a failure of the participating governments to fully enforce the price cap and punish violators,” Isaac Levi, the CREA’s team lead for Europe-Russia policy and energy analysis said.
He added that Russian oil could exceed the $60 limit set by the G7 if Western services are not involved, as about three-quarters of all shadow fleet trips were dedicated to transporting Russian crude oil.
As a reminder, the European Union's embargo on imports of marine oil from Russia has been in effect since December 5, 2022. In addition, the G7 countries and Australia have introduced a price ceiling of $60 per barrel for Russian oil.
The price ceiling prohibits Western companies from providing services such as transportation, insurance, and financing for oil sold above the limit.
However, according to the Financial Times, Russia has managed to avoid G7 sanctions on most of its oil.
Author – Anastasiya Glotova, 26/09/2023