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Russian oil at German gas stations? That's how easy Putin can bypass an oil embargo

2022-06-29T03:33:32.377Z


Russian oil at German gas stations? That's how easy Putin can bypass an oil embargo Created: 06/29/2022, 05:15 By: Lisa Mayerhofer At the G7 summit, Western heads of state are discussing an oil price cap. There are already indications that Russia is managing to circumvent the West's oil embargo. Munich – Despite all Western sanctions since the attack on Ukraine, Russia continues to make enormo


Russian oil at German gas stations?

That's how easy Putin can bypass an oil embargo

Created: 06/29/2022, 05:15

By: Lisa Mayerhofer

At the G7 summit, Western heads of state are discussing an oil price cap.

There are already indications that Russia is managing to circumvent the West's oil embargo.

Munich – Despite all Western sanctions since the attack on Ukraine, Russia continues to make enormous sums of money from the sale of fossil fuels.

US Treasury Secretary Janet Yellen therefore proposed the introduction of a price cap at the G7 summit at Schloss Elmau in order to reduce revenues from Russian oil.

The implementation of the step is considered extremely difficult.

There are already indications that Russia is managing to circumvent the West's oil embargo.

India, which likes to buy its oil from Russian President Vladimir Putin, plays a role here.

According to the 

Reuters 

news agency , Indian refineries have bought larger quantities of Russian oil in recent months - more than three times as much as in the same period last year.

Russian oil at German gas stations: India as a back door

Since India can buy Russian oil at deep discounts, exporting becomes a lucrative business.

According to research by the 

Wall Street Journal

, private Indian oil refineries are now increasingly supplying the global market - including Europe - with diesel and gasoline containing Russian oil.

But the seller would not disclose this information.

"Indian refiners are clearly buying significant amounts of discounted Russian crude and then exporting a significant proportion of refined products back out of the country," Craig Howie, an analyst at financial services group Shore Capital, told Britain's

The Guardian newspaper

.

"Given the high price of petrol and diesel, the profit margins for Indian companies are probably stable."

There are several obfuscation tactics for Russian oil

There are various ways for oil transporters to disguise the origin of Russian oil.

According to the

Guardian

, ship-to-ship oil shipments have also skyrocketed.

From this, the British newspaper concludes that oil is being transshipped from ships flying the Russian flag to other ships.

The boats would only have to switch off their automatic identification systems while loading the oil.

In addition, Russia can adopt a tactic adopted by Iran, which has long been subject to tough sanctions: The country simply refrained from using a currency in oil trading and exchanged the black gold directly for other products such as precious metals, food or weapons, according to the

Guardian.

In all cases, the sellers can then simply pass the oil on to unsuspecting Western customers.

There are many ways to get Russian oil to German gas stations relatively easily, despite the embargo.

"If a country or an oil company wants to hide the origin of crude oil or oil products, they can do so very easily," said Ajay Parmar, an oil market analyst at the energy price information service ICIS.

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G7 summit at Elmau: Discussion about oil price caps

This will also make it more difficult to enforce an oil price cap.

In fact, it would only work if all major buyer countries outside of the G7 participated.

In particular, large countries such as China or India, which despite the war maintain close economic ties with Russia, should be brought on board.

It is therefore also being discussed whether the price cap can be enforced with the help of certain services related to Russian oil.

These include, for example, insurance and oil transport by ship.

Such services would be banned by the participating countries.

There would only be an exception if the Russian oil was sold cheap enough in the specific case.

This could also make it more difficult for Russia to transport its oil to other buyer countries, which would generally pay more.

(lma/dpa)

Source: merkur

All news articles on 2022-06-29

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