Bloomberg agency rated Russia’s costs to circumvent the $11 billion oil ceiling introduced a year ago. Journalists studied data from Indian customs, where Russian oil arrives, and the total volume of its exports, almost half of which now falls on the so-called “shadow fleet.”
A year ago, the G7 countries and the European Union introduced an oil ceiling that prohibited companies from these countries from transporting and insuring oil purchased from Russia for more than $60 per barrel.
However, after this, Russia began using a shadow fleet to export oil, consisting of old tankers that turn off their beacons so that they are not visible to tracking systems. Late September 2023 Bloomberg told about several such tankers encountered in international waters off the southern coast of Greece to pump oil. During the year the ceiling was in effect, the shadow fleet, as Bloomberg writes, transported about 45% of Russian oil.
The price of oil by the time it reached Asian countries (after the introduction of restrictions, Russia redirected a significant part of supplies to India and China), according to Bloomberg calculations, averaged $72 per barrel – that is, $12 above the ceiling. Over the past year, according to the publication, Russia exported about 3.5 million barrels of oil per day. These calculations give a figure of about 11 billion dollars.
The purpose of the ceiling was to limit Russia’s oil revenues. But, according to Bloomberg calculations, on the contrary, they have grown. In October, oil revenues of $11.3 billion accounted for 31% of the country’s total net budget revenues for the month. As Bloomberg notes, this is the highest figure since May 2022. In addition, it exceeds the figures for any month of the year preceding the invasion of Ukraine.
An oil ceiling of $60 per barrel was agreed upon by Western countries in early December 2022. According to the authors, this measure was supposed to limit Russia’s income from oil exports without creating a jump in energy prices on the world market. At the same time, EU countries banned the import of Russian oil.
However, the effectiveness of the ceiling was questioned by a number of experts from the very beginning. In addition, China and India, where Russia redirected about 90% of exports after introducing restrictions, did not join the ceiling.
By the fall of 2023, when it became knownthat Russia sells oil to India at $80 per barrel (that is, significantly higher than the established price), many experts have already indicated that the ceiling does not work. However, American officials and supporters of the ceiling who participated in its development explainedthat the ceiling should lead to a significant increase in costs for Russia when transporting oil.
At the same time, how writes Politico, according to the Center for Research on Energy and Clean Air, Russia’s lost benefits from the ceiling for the year amounted to about 34 billion euros, but this is significantly less than what the developers of the restrictions expected. In addition, the ceiling effect was most intense in the first half of 2023, and then it began to fade.
The price of Russian oil has exceeded the ceiling that the West set for it. So what now? Do Western countries still buy it?
2023-12-06 15:43:00
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