According to a report by the Financial Times, the European Union (EU) and G7 countries have failed to enforce a $60 per barrel price cap on Russian seaborne oil exports. The report cites an analysis of shipping and insurance records, stating that nearly three-quarters of Russia’s seaborne crude shipments in August did not use Western insurers. This lack of Western insurers was seen as a tool to limit the price at which Russian crude was being sold on the global market.
The data from Kpler, a data intelligence firm, reveals that about half of Russian oil exports did not use Western insurance services throughout the spring. This suggests that Moscow is becoming more adept at circumventing the price cap imposed by Western allies. Despite the efforts to curb Russian crude prices, global prices for crude are on the rise, reaching 13-month highs. Brent futures for November delivery were trading at $93.51 per barrel on Monday, while US West Texas Intermediate crude (WTI) climbed above $90 per barrel. Russian crude also followed this trend, with the Far Eastern blend ESPO trading at over $88 per barrel, and Urals crude above $78 per barrel.
The report supports the claims made by US Deputy Treasury Secretary Wally Adeyemo in June that the price cap imposed by Western allies has been effective in decreasing Russian revenue. He stated, “In just six months, the price cap has contributed to a significant decline in Russian revenue at a key juncture in the war.” Acting US Assistant Treasury Secretary Eric Van Nostrand also expressed confidence in the price cap, stating that it is achieving its twin goals of restricting Russian revenues and stabilizing energy markets.
In response to the lack of Western insurers, Russian, Chinese, and Indian insurers have stepped in to replace major Western insurers. Additionally, a “dark fleet” of tankers, specifically built for transporting Russian crude, has helped Moscow avoid Western insurers and shippers. These actions illustrate Russia’s ability to adapt and find alternative solutions to continue exporting its crude oil.
The rise in global crude oil prices along with Russia’s successful circumvention of the price cap highlights the challenges faced by the EU and G7 countries in controlling Russian oil exports. Despite efforts to limit Russia’s revenue and stabilize energy markets, the current situation indicates that more needs to be done to effectively enforce the price cap. As the market continues to evolve, it remains to be seen how Western allies will respond to Russia’s strategies and ensure the adherence to imposed caps on oil prices.
For more stories on economy & finance, visit RT’s business section.
Source link
