G7 countries want to force Russia to transport oil on Western ships
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G7 countries intend to limit Russia’s ability to use shadow fleets to circumvent oil price restrictions, said Olga Dimitrescu, head of department at the UK Financial Sanctions Enforcement Office (OFSI). According to her, the measures should force Russia to return to Western oil transportation services, taking into account the price ceiling.
“We will make it more difficult for Russia to use its shadow fleet, which in turn will lead to more volume returning to the G7 fleet, where service providers comply with restrictions,” Ms. Dimitrescu said on the NorthStandard podcast (quoted by agency Bloomberg). According to her, measures are expected to be taken in the second quarter of 2024 to tighten the circumvention of price restrictions on Russian oil.
The European Union has already imposed restrictions on the sale of old tankers to unknown buyers, making it difficult to replenish the Russian shadow fleet, Bloomberg reports. Now countries are developing bans that would force Russia to use the fleets and services of G7 countries to transport its oil.
In December 2022, the G7 countries, the European Union and Australia agreed on a price threshold – accordingly, international companies can transport or insure Russian oil only at a price below $60 per barrel. From February 5, 2023, there is also a price ceiling for petroleum products from Russia at $100 and $45 per barrel, depending on the category.
Russia began transporting its oil products using a shadow fleet, circumventing restrictions. According to Bloomberg, in October 2023, more than 99% of Russian seaborne oil supplies were carried out at a price exceeding the ceiling set by the G7 countries. Russia’s net oil revenues for the same month amounted to $11.3 billion, or 31% of the country’s total budget revenues for the month. This figure, according to the agency, was the highest since March 2022.
Read more about the current situation with the transportation of Russian oil in the material “Tankers have no place here”.
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