Russia, "ghost" fleet to get around the oil blockade

Russia, ghost fleet to get around the oil blockade


Russia has allegedly prepared a "ghost" fleet of more than 100 tankers, not registered as Russian, to circumvent Western sanctions imposed on Moscow's oil for its invasion of Ukraine. These ships loaded with Russian crude, subjected inside the the European Union to purchase with the recent maximum price limit of 60 dollars per barrel, they could be used either without insurance, thus also putting the crews at risk, or through non-Russian operators excluded from the sanctions.

The international case:

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How the oil price cap works 

The oil price cap, also known as the price cap, prevents large tankers carrying Russian oil from accessing Western marine insurance unless the crude in question sells below $60. per barrel, as set by the European Union in agreement with the other G7 countries. Without insurance, tankers will not bea> able to dock at international ports, thus preventing the sale of their cargo.

The goal of the price cap is to significantly reduce Moscow's revenues, while keeping the flow of oil arriving from the Russian Federation intact, in such a way as to affect the Kremlin's military spending capacity. If the sanctions were to work, Russia would lose about $60 billion. A much lower figure than requested by Poland and the Yermak-McFaul sanctions working group, led by the head of the Ukrainian cabinet office, Andriy Yermak, and former US ambassador to Russia, Michael McFaul.
According to the study presented by the group and supported by Poland, the adequate threshold to actually damage the Russian economy should have been around 30-35 dollars a barrel. In this way, the revenues due to oil exports would have been more than halved, reducing to about 100 billion dollars. On the contrary, with the current price cap of 60 dollars, Russia will still be able to count on revenues close to 200 billion and the financial pressure on the country will not be sufficient to put it seriously in difficulty.

The European Union is putting a ceiling on the price of Russian oil The measure is contained in the latest package of sanctions against Russia and contains an emergency mechanism for states. Meanwhile Eni announces that Gazprom has reactivated gas flows to Italy

The ghost fleet and the traffic jams in Turkey

Although the price cap will not be able to bring Russia's exports to their knees, the precarious the country's economic situation and the enormous military expenditure which weighs on the state budget make Moscow fear the loss of any possible income. Therefore, according to the Financial Times , from February 2022 the Kremlin would have begun to buy dozens of tankers anonymously , which disappeared from the radars of energy and shipping companies once they arrived in Russian waters.

The ships would come from Iranian and Venezuelan and could be made to operate without insurance or through third parties, in such a way as to complicate the checks and be able to evade the sanctions. For this reason, Turkey has begun to impose new insurance controls on all ships arriving from the Black Sea, asking the large marine insurance companies to provide additional guarantees and letters of protection and indemnity, which also cover the danger of violation of the sanctions.

However, according to what insurance spokespersons told the Financial Times, suppliers cannot guarantee this kind of insurance coverage, because otherwise it would render the sanctions ineffective. This situation has therefore created a huge tanker traffic jam around the Turkish coast , with vessels at rest waiting to cross the Bosphorus and the Dardanelles since 29 November . A situation unleashed by the Turkish authorities, which risks slowing down global oil flows even beyond Russian exports.

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