- Russia exported almost all of its oil in October at prices above the G7 price range, Bloomberg reports.
- Western sanctions appear to be having little impact on Moscow’s ability to finance the war in Ukraine.
- The report said Russia sold oil at an average of $79.40 per barrel at the time of export.
Russia was able to avoid price limits on its oil exports almost entirely in October, as an effort by G7 countries to reduce Moscow’s war revenues proved difficult to enforce.
In October, oil leaving Russia’s major ports sold for an average price of $79.40 a barrel, and 99% of Moscow’s oil exports were sold above the price limit, according to Bloomberg reporting and KSE Institute research.
The G7 imposed the price ceiling last December to limit Russia’s ability to finance the war in Ukraine and to keep the flow of crude to global markets. The sanctions are aimed at preventing G7 countries from providing insurance and shipping services for any oil sold above the $60 per barrel limit.
However, Russia has been able to circumvent most of the West’s sanctions in recent months by turning to a fleet of shadow tankers to help boost the country’s oil revenues.
In October, the KSE Institute said that about 30% of all seaborne crude oil was shipped with coverage from G7 and EU countries, or linked to other services from the West.
According to Bloomberg, the researchers said, “This points to widespread violations of the price cap system in the form of ‘verification fraud’.” “This means that oil traders and brokers are potentially providing inaccurate pricing information to G7/EU service providers.”
The KSE Institute said the price cap could be better enforced and ultimately made more effective if policymakers increased penalties for companies or nations that violate the price cap. The group is part of the Kyiv School of Economics, which has previously advocated for more stringent enforcement of sanctions on Russia.
Before Vladimir Putin launched a “special military operation” in Ukraine last February, Russia was the world’s 11th-largest economy. It accounts for about 40% of the EU’s natural gas imports and about 25% of its crude oil.
Now, most of Russia’s economic data is impossible to verify, and experts doubt whether its wartime economy is as alive as Putin and other officials claim.
International oil benchmark Brent crude was down more than 5% on Thursday, trading at $77 a barrel.