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Russia sanctions: Is the West looking down the tube? Putin circumvents oil price cap

2023-09-26T16:41:18.416Z

Highlights: Russia sanctions: Is the West looking down the tube? Putin circumvents oil price cap.. Status: 26.09.2023, 18:30 p.m. GMT. Patrick Freiwah: The price cap for oil seems to miss its target: an evaluation shows exactly the opposite. The measure is actually intended to prevent even more money from coming into the Kremlin's coffers to finance the Ukraine war through high proceeds from the sale of raw materials. The proportion of oil transactions not subject to the price cap of 60 dollars per barrel has risen sharply within a few months.



Status: 26.09.2023, 18:30 p.m.

By: Patrick Freiwah

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A tanker loaded with oil on its way through Russian waters. © Konstantin Trubavin/Imago

The West wants to massively harm Russia with sanctions. However, the price cap for oil seems to miss its target: an evaluation shows exactly the opposite.

Moscow/Munich - In the wake of the sanctions against Russia, the West sometimes imposed an oil price cap. The measure is actually intended to prevent even more money from coming into the Kremlin's coffers to finance the Ukraine war through high proceeds from the sale of raw materials. But this tactic of the Western nations does not really seem to be bearing fruit.

While energy prices have recently risen again due to fundamentally changed supply routes (including the abandonment of the Nord Stream pipelines) and the shortage of the oil-exporting countries Saudi Arabia and Russia, Russian raw material exports are apparently still flourishing:

Russia sanctions: price cap for oil is simply circumvented

As the Financial Times ("FT") reported, oil supplies from the world's largest country in terms of area have recently even risen again. According to an analysis of shipping and insurance documents from data service provider Kpler, about 75 percent, or three-quarters of transactions, were conducted without Western insurance in August 2023. However, according to the information, this is the only instrument that the West has in its hands to monitor compliance with the price cap.

An earlier evaluation showed that President Vladimir Putin's country's share of oil supplies was still about 50 percent in the spring. The proportion of oil transactions that are not subject to the price cap of 60 dollars per barrel has risen sharply within a few months.

Due to the reduced production and the associated increase in the price of oil (and thus also in fuel prices), Russia can therefore rely on higher revenues. This does not seem to be a new finding: Months ago, a study testified to such a development, but apparently hardly anything has happened since then:

Despite sanctions, Russia earns a lot from oil - including manipulations?

According to research by the Kyiv School of Economics (KSE) in Ukraine, Russia's revenues have also skyrocketed due to the rise in world oil prices. As a result, the institute forecasts additional growth of 17 billion US dollars for the current year, and even 2024 billion dollars for the coming 33. For example, the institute's evaluation expects a decline in the effectiveness of the sanctions, because in addition to the increased crude oil costs, there would also be fewer discounts for customers.

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How will Russia succeed in circumventing the oil price cap imposed by the G2022 countries, the EU and Australia at the end of 7? Der Spiegel reports on a trick that manipulated certificates for oil supplies sometimes play a role in profits. In the case of these exports, only a lower price is officially mentioned, in reality the amount is higher. But the sanctions against Russia would also have a negative impact on the Kremlin's trade balance:

Russia sanctions too loose? Ukrainian institute calls for more control

According to estimates by the CFE Institute, war opponents Russia have lost about 100 billion US dollars in oil export revenues since the beginning of the invasion. As far as the fall in the ruble is concerned, the interest rate hikes carried out by the Russian central bank have not yet sufficiently counteracted. The ruble is allegedly continuing its downward trend and is approaching the critical marks of 100 rubles per 1 US dollar (currently 96.20, editor's note).

It is true that the Russian economy has been severely affected by the international sanctions, so that the trade balance between January and August shrank by 68 percent compared to the same period last year. However, there are calls for tougher sanctions: Among other things, further lowering of the oil price limit and stricter documentation requirements are mentioned. (PF)

Source: merkur

All news articles on 2023-09-26

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