Russia has been reported to have resorted to increased use of its own oil tankers to deliver its crude oil to buyers.
EU and its American allies had levied strict sanctions banning all Russian crude oil imports to EU nations transported by sea from on December 5.
In addition, G7 nation buyers of Russian seaborne crude oil can only do so at a price below $60 per barrel if they want to use European ships or insurers.
The combined effects of these sanctions, Bloomberg reported, have resulted in a drop in European tanker cargoes from key western oil ports in Russia. Since December 5, European tankers have carried about 30% of all cargoes shipped out of western oil ports in Russia—down from 50% before, the report said.
Russian tanker activity, however, has increased, with 35% of the crude oil from those Russian ports shipping via Russian tankers—up from 22% before.
On the other hand, while EU importers can no longer purchase seaborne Russian crude oil, G7 nations can, provided it is under the designated price cap set by the group.
Agency said up till last Friday, Russia’s flagship crude oil grade, Urals, was trading well below the cap at $38 per barrel. The Kremlin said this week that it had yet to see any cases of price caps imposed on Russian crude oil over the last month.
Russian President Vladimir Putin last month signed a decree banning the sale of crude oil and oil products to any nations that abide by the G7 price cap, beginning on February 1. This ban is in effect for five months.
The EU and G7 seem not done with Russia. Another ban—this time on oil products from Russia, is set to go into effect on February 5, and the G7 is set to impose two price caps on Russia’s crude oil product sales—one for products trading at a premium to crude oil, and another for products trading at a discount to crude.