A price cap by the G7 and a complete ban by the EU on Russian crude exports came into effect on December 5th. Russian crude oil exports have declined sharply since then with different sources reporting different degrees of decline in exports.
The oil prices rose by as much as 2% on the day the price cap became active. Two different data providers have reported on the decline in export volume, but their reported figures differ. Kepler, a commodity analytics firm reported that Russian crude exports via the sea fell by 500,000 barrels per day on December 6th. This is roughly a 16% fall from the November average of 3.08 million barrels per day.
There is also a traffic jam of more than a dozen tankers in the Turkish straits, stemming from a dispute between the local authorities and maritime insurers due to the imposed sanctions and the price cap.
The EU price cap and oil ban also prohibit EU operators from insuring and financing the transport of these Russian crude exports. Russian vessels are expected to evade these sanctions by registering in the Marshall Islands or Liberia but maritime security has been reinforced in anticipation of this. With difficulties in acquiring insurance, a shortage of high-quality equipment, and no access to international service companies, Russian crude exports are predicted to fall in the future.
Standard Chartered analysts are predicting a sharp fall of 1.44 billion barrels per day in Russian export volume in 2023.
The opinions expressed herein are the author’s and not necessarily those of News2Sea.
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