One year after the introduction of the Western price cap for Russian oil exports to third countries, work is underway to further tighten the associated requirements.
Because the sanctions instrument has recently no longer worked as planned, the monitoring measures and documentation requirements are to be tightened, according to information from the German Press Agency in Brussels. In the future, it could become more difficult for shipping companies to participate in circumventing Russia sanctions with impunity.
Ideally, the tightening of the price cap instrument should be decided by the end of the year as part of the twelfth EU sanctions package due to the Russian war of aggression against Ukraine. This also includes a proposal to restrict trade in diamonds from Russia.
The price cap came into force a year ago today along with a far-reaching ban on the import of Russian oil into the EU. It is actually intended to force Russia to sell oil to buyers in other countries for a maximum of 60 US dollars per barrel (159 liters).
Hope: relaxation on energy markets
In order to enforce the price cap for exports to non-EU countries, it was decided that maritime transport services essential to Russian oil exports would only be allowed to be provided with impunity if the price of the exported oil did not exceed the price cap. Western shipping companies can continue to use their ships to transport Russian oil to countries such as India, China or Egypt. The regulation also applies to other important services such as insurance, technical assistance and financing and brokerage services.
The hope is that the price cap will lead to relaxation on the energy markets in the long term and will also relieve pressure on third countries. In addition, it should be ensured that Russia can no longer benefit from increases in oil prices and thus fill its war chest.
However, according to researchers at the Kyiv School of Economics, recent data now suggests that more than 99 percent of Russian crude exported by sea in October was sold at a price of more than $60 (55 euros) a barrel should. This is probably possible because fake price certificates are provided, they write. In addition, Russia could increasingly rely on a “shadow fleet,” i.e. ships that are not owned by Western shipping companies or not insured by Western insurance companies.
