Russian Crude Oil Exports Sold Above Price Cap

The G7 price cap on Russian crude oil exports is being almost completely circumvented, a senior EU government official said.

• Almost none of the shipments of Russian seaborne crude in October were sold below the $60/bbl price cap, the official said.
• “The latest data makes the case that we’re going to have to toughen up…there’s absolutely no appetite for letting Russia just keep doing this,” the official said.
• The EU's top diplomat, Josep Borrell, has told reporters, after a meeting of EU foreign ministers on Monday, that EU officials are "finalising" the "last details" of the 12th package of sanctions on Russia, expected to include a ban on Russian diamonds and measures to tighten enforcement of the price cap on Russian oil.
• Russian Urals crude averaged $81.52/bbl in October according to data from the Russian Finance Ministry.
• In October, only 37 of the 134 vessels that shipped Russian oil held western insurance and officials said the number operating below the cap is now likely to be much lower.
• A US Treasury official said the goal was not just an effort for Russia to sell most of its barrels below the price cap but also to change the country’s incentives in a way that makes it make hard choices. Shifting to selling oil largely without western insurance and shipping has caused great costs to the Kremlin.
• Jeffrey Sonnenfeld, a professor at the Yale School of Management, said longer journeys for Russian oil tankers, higher insurance premiums, additions to port capacity and new capital expenditures had added about $36/bbl to the cost of Russian oil sales, limiting Moscow’s profits.
• Last week the UK sanctioned Paramount Energy & Commodities DMCC, a Dubai-based trader, saying it had been used by Russia to soften the blow of oil-related sanctions.
• The US Treasury department this month requested information from 30 ship management companies about 98 vessels it suspects of violating the cap, a person familiar with the matter said. Of the 30 ship management companies contacted, 17 of them were in G7 price-cap coalition countries. Six were in the UAE, with others in India, Turkey, China, Hong Kong and Indonesia, the person added.