The US Treasury seeks to increase Russia’s costs of transporting oil by sea

Acting Assistant Secretary of the Treasury for Economic Policy Eric Van Nostrand said that American authorities are working in two directions “in the second stage” of the oil price ceiling. The first is sanctions against those who circumvent the restriction, the second is the costs for Russia when transporting oil by sea.

“We are looking at many different ways to increase the costs that the dark fleet faces. Both to prevent its further expansion, and so that when the Kremlin decides to invest additional funds in it, it will continue to drain funds from its military funds,” the assistant secretary said at a seminar at the Brookings Institution (quoted by TASS).

The G7, the European Union and Australia introduced a price ceiling on Russian oil and petroleum products in December 2022 and February 2023, respectively. The first is set at $60, the second – from $45 to $100, depending on the category of petroleum products. The price ceiling mechanism involves a ban on the transportation and insurance of oil and petroleum products from Russia, which is purchased by countries that have not joined the embargo.

The weighted average price of Russian oil in September, according to the International Energy Agency, was noticeably higher than the price ceiling, at $81.8 per barrel. According to the Russian Ministry of Finance, Russian oil costs $83.1 per barrel.

Read more about the situation on the oil market in the Kommersant article. “Oil overflows through the ceiling”.

Leonid Uvarchev