Greenpeace protest against an oil tanker from Russia in early 2022
Photo: Will Rose / dpa
One year after the introduction of the Western price cap on Russian oil exports to third countries, work is underway to further tighten the associated requirements. Because the sanction instrument has recently no longer worked as planned, according to information from the German Press Agency in Brussels, the monitoring measures and documentation obligations are to be tightened. This could make it more difficult for shipping companies to participate in the circumvention of Russia sanctions with impunity in the future.
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. It also includes the proposal to restrict trade in diamonds from Russia.
The price cap came into force a year ago on Tuesday, along with a far-reaching ban on imports of Russian oil into the EU. It is actually intended to force Russia to sell oil to customers in other countries for a maximum of 60 US dollars per barrel (159 liters) in the future.
In order to enforce the price cap on exports to non-EU countries, it was decided that maritime transport services essential for Russian oil exports can only be provided with impunity if the price of exported oil does not exceed the price cap. Western shipping companies can thus continue to transport Russian oil to countries such as India, China or Egypt with their ships. The scheme also applies to other essential services such as insurance, technical assistance, and financing and brokerage services.
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 is likely to have been sold at a price of more than $60 (€55) per barrel in October. 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 in the hands of Western shipping companies or are not insured by Western insurance companies.
In the long term, the price cap should lead to an easing of tensions on the energy markets and also relieve the burden on third countries. In addition, it is to be ensured that Russia can no longer benefit from oil price increases and thus fill its war chest.