Exceeding the Russian oil price ceiling prompted Western countries to act

Western officials complain that Russian oil trade exceeds the ceiling price of $60.

The G7 members had designed the price cap “to maintain the flow of Russian crude oil into global markets while trying to avoid supply pressure and price increases that would benefit Moscow.” But things did not go exactly as the Allies wanted in the oil trade.

According to the Financial Times, the US cap on Russian oil sales has been almost completely exceeded, according to Western officials and Russian export data.

After that, Western countries began looking for ways to strengthen the implementation of the price ceiling, which is one of the most important economic sanctions against Moscow.

Statement from the authorities

According to a senior European government official, none of the seaborne crude oil shipments in October were below the $60 per barrel limit that the G7 and its allies are trying to impose.

“The latest data reveals that we need to take a tougher stance,” the official said. “We absolutely cannot tolerate Russia continuing to do this,” he added.

EU officials also held talks on strengthening enforcement, including options to strengthen enforcement and restrict Russia’s access to the oil tanker market.

Official Russian statistics on oil sales in October showed that the average price of a barrel of oil in Moscow exceeded $80. The jump in Russian oil prices dealt a blow to the G7’s efforts to limit the flow of revenue to the Kremlin.

G7 members and Australia imposed caps on crude oil prices last December, aiming to reduce Russia’s revenues by cutting off access to Western services such as shipping and insurance if traders do not adhere to the $60 limit.

Limit exceeded $60

The average price of Urals oil, Russia’s main export product, also rose above the $60 level this summer as oil prices rose due to supply cuts by Saudi Arabia and the OPEC+ group in Moscow.

On the other hand, nearly three-quarters of Russian crude oil transported by sea in August was transported without Western insurance. This indicates that the number of people starting to exceed the price limit is increasing.

It was revealed that only 37 of the 134 ships carrying Russian oil in October had Western insurance. Officials said the number of ships operating below the permissible limit may now be much lower.

The steps are already ready

However, G7 members have already begun to accelerate their steps towards border enforcement. Last week, the UK imposed sanctions on Paramount Energy & Commodities DMCC, a Dubai-based company. Britain claimed that Russia was “using the company to mitigate the blow of oil-related sanctions.”

On the other hand, this month the US Treasury Department requested information from 30 ship management companies about 98 ships suspected of violating the border. 17 out of 30 companies contacted belong to countries that have accepted sanctions. The sixth company is located in the United Arab Emirates. There are other companies in India, Turkey, China, Hong Kong and Indonesia.

release date: 11:29, 14 November 2023

(Tags for translation) United States of America

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