Russia poised to largely skirt new G7 oil price cap

By | October 22, 2022

Reuters reports:

Russia can access enough tankers to ship most of its oil beyond the reach of a new G7 price cap, industry players and a U.S. official told Reuters, underscoring the limits of the most ambitious plan yet to curb Moscow’s wartime revenue.

The Group of Seven countries agreed last month to cap Russian oil sales at an enforced low price by Dec. 5 but faced consternation from main players in the global oil industry who feared the move could paralyse the trade worldwide.

Months of discussions between the United States and those insurance, trading and shipping firms have mollified concerns on their exposure to sanctions but all parties now realize Russia can largely skirt the plan with their own ships and services.

The forecasts on the resilience of the Russian oil trade and details of the discussions between Washington and the global oil and services industry have not previously been published.

Estimates that up to 80-90% of Russian oil will continue to flow outside the cap mechanism if Moscow seeks to flout it are not unreasonable, a U.S. Treasury official told Reuters. [Continue reading…]

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