Russia is increasing the number of its own oil tankers that it is using to deliver its crude oil to buyers, Bloomberg said on Friday.
The EU levied strict sanctions banning all Russian crude oil imports to EU nations transported by sea on December 5. On top of that, G7 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.
These sanctions have resulted in a drop in European tanker cargoes from key western oil ports in Russia, Bloomberg said. Since December 5, European tankers have carried about 30% of all cargoes shipped out of western oil ports in Russia—down from 50% before. Russian tanker activity, however, has increased, with 35% of the crude oil from those Russian ports shipping via Russian tankers—up from 22% before.
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.
But as of 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.
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.
By Julianne Geiger for Oilprice.com
More Top Reads From Oilprice.com:
- Why Oil’s 7-Month Downturn May Be About To Reverse
- 2023: Expect A Financial Crash And Major Changes In Global Energy Markets
- Oil Prices Steady As Chinese Demand Counters Huge Crude Build