As the war in Ukraine continues, Russia, one of the world’s largest oil producers, has increasingly relied on non-Western companies to transport its crude oil to international markets.
To weaken Russia’s financial resources without causing major disruptions to global oil supplies, the G7 countries and their allies imposed a price cap on Russian crude oil exports. The cap, which came into effect on December 5, 2022, limits the sale price of Russian oil to $60 per barrel. It also bans tanker operators, insurers, and other service providers from supporting Russian oil shipments unless they comply with this price ceiling.
However, the price cap does not apply to tankers flagged, owned, or operated by companies outside the G7, the European Union, Australia, Switzerland, and Norway. Additionally, tankers not insured by Western protection and indemnity clubs are also exempt from the cap.
Despite the older and less well-maintained condition of these non-price-capped tankers, their share of Russia’s crude exports has grown in recent months. This trend has been driven by rising prices for Urals, Russia’s flagship crude oil, and stricter enforcement of sanctions by the West.
Analysis by S&P Global Commodities at Sea and Maritime Intelligence Risk Suite reveals that non-price-capped tankers play a larger role in transporting Russian crude to the Pacific markets. Crude oils such as Sokol, Sakhalin Blend, and Eastern Siberia–Pacific Ocean grades are increasingly being shipped using these vessels, compared to Russian oil from the Baltic or Black Sea regions, like the Urals grade.
Tanker operators in Greece, traditionally a dominant player in the oil shipping industry, maintained a strong presence in Russia’s oil trade during the early months of the price cap. However, in recent months, operators from the UAE, Russia, China, and Hong Kong have gained ground, gradually increasing their market share in the Russian oil transport sector.
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