In early March 2024 the oil tanker Andromeda Star collided with another ship near Denmark. It is hard to imagine the possible damage to the environment if the 700,000-barrel capacity vessel had cargo on board. But the empty tanker made its way back to Russia after transporting the sanctioned crudes.
Despite sanctions, Russia is able to export its crude oil above the established price cap of $60 per barrel. How is it possible?
Since its full-scale invasion of Ukraine, Russia increased access
to oil tankers owned by countries outside of the price cap coalition. These are known as the “shadow fleet”.
Often these are dangerous, practically unaccountable and uninsured oil tankers that Russia uses to circumvent the price cap policy. Since the implementation of sanctions, “shadow” tankers voyages transporting Russian oil have increased by 82%. The total transportation of Russian oil has increased by 37%. Meanwhile, tankers owned or insured in countries implementing the price cap accounted for 35%.
Who is buying Russia’s fossil fuels?
China was the largest buyer of Russia’s crude exports, followed by India, the EU, and Turkey.
Between December 2022-2023, a strict adherence to the price cap policy through greater monitoring and enforcement would have slashed Russia’s crude oil revenue by 9%. While a price cap set at USD 30 per barrel would have reduced Russia’s earnings by 25%.
But despite the growth of Russia’s access to shadow tankers 46% of its crude has been shipped by tankers owned and insured by G7 or the EU.
This constitutes significant leverage for the price cap coalition!
Solving the problem of shadow tankers is in the interests of the entire world, as the consequences of an oil spill from even one outdated vessel would be catastrophic for the environment. Not mentioning the use of Russian oil money for bloody attacks on Ukraine.
It’s crucial to prevent Russia from further expanding its access to the shadow fleet, enhancing monitoring and enforcement of the oil price cap policy.
Негізгі бет Russia's 'Shadow Fleet' explained
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