The number of Russian crude oil deliveries has increased by 50 percent despite the price ceiling set for Russian oil in the spring of this year, reports The Financial Times.
Russia has managed to circumvent the price ceiling set for the export of its oil in the majority of its oil shipments, says Financial Times (FT).
Last December, the EU, the G7 countries and Australia agreed on a price ceiling of $60 per barrel for Russian crude oil transported by sea. The purpose of the price ceiling was to limit Russia’s ability to finance its war of aggression in Ukraine.
With the price cap, Western service providers such as shipping companies and insurance companies are allowed to offer their services to tankers that transport Russian oil. Oil has been sold for a maximum price of 60 dollars a barrel.
However, in August, almost three-quarters of the oil exported by sea in Russia was transported without Western insurance, according to a Financial Times analysis of shipping and insurance data. FT has previously reported that Russia circumvents oil sanctions with a “ghost fleet” that can operate without Western insurance or other services.
According to the statistics of freight analysis company Kpler and insurance companies, Russian crude oil deliveries have indeed increased by 50 percent since the spring of the current year, FT reports.
According to FT, the increase in the number of oil deliveries indicates that Russia is becoming more skilled at circumventing the oil price ceiling. It allows Russia to sell more oil at prices that are closer to world crude oil prices.
The Kyiv University of Economics has estimated that the circumvention of the price ceiling and the rise in world market prices of crude oil will probably inflate Russia’s oil revenues by at least around 15 billion dollars this year, FT reports.
G7 countries the idea of the agreed price ceiling has been to simultaneously reduce Russia’s oil income and ensure that Russian oil still flows to the world market and keeps the world market price of oil low.
When the price cap was introduced last December, the price of Russian oil fell sharply and Russia had to sell its Urals oil grade cheaper than the reference price of North Sea Brent grade.
Last week, Russia decided to temporarily limit the export of diesel and other fuels from the country. According to the government, the purpose is to calm the country’s domestic fuel market. Russia did not specify in more detail how the export ban would work exactly.
Russia’s decision may worsen the current diesel shortage caused by oil production restrictions and the faster-than-expected economic growth of the United States and China.
Crude oil has clearly become more expensive after the major oil-producing countries Russia and Saudi Arabia announced that they would limit oil production.
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