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58 Opinion bne November 2023
TEHRAN BLOG
Non-Western tankers carry most
of Russian crude exports, G7 oil
price cap fails bne IntelliNews
Three-fifths of Russia's seaborne crude exports are now being shipped by tankers not required to comply with the G7 oil price cap, according to S&P Global data, as the oil price cap sanctions are increasingly seen to have failed.
Nearly 2mn barrels per day (bpd), or 60%, of Russian crude exports were shipped on tankers owned by companies registered outside the G7 in September and not insured by Western P&I Clubs, the main mechanism for enforcing the oil price cap rule that bars tankers from carrying Russian oil that costs more than $60, introduced on December 5, according
to S&P Global Commodities at Sea and Maritime Intelligence Risk Suite.
In order to avoid the sanctions Russia has expanded its “ghost fleet” of tankers that operate outside Western insurance
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schemes, which allows them to ignore the sanctions. Many of these ships were bought from Greek shipping companies and are typically well past their “sell-by date,” causing some to raise the spectre of an environmental disaster waiting to happen, should one of Russia’s ageing tankers sink.
Peterson Institute for International Economics (PIIE) and Kyiv School of Economics (KSE) have also documented widespread cases of EU-flagged tankers simply ignoring the sanctions, especially in the Pacific Ocean, where the ships, many of which are Greek, do not sail through EU-controlled waters.
S&P Global’s analysis shows the total share of non-Western tankers moving Russian crude already stood at 48% of total exports by November 2022, a month before the price cap came into effect, but since then the share has risen to 60%.
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