Russia has managed to almost entirely circumvent a G7 price cap on its oil exports, with Moscow claiming average sales at more than $20 per barrel above the imposed limit, the Financial Times reported Tuesday, citing Western officials and Russian export data.
According to an unnamed senior European official who spoke to FT, “almost none” of Russia’s oil shipments in October were sold below the price cap.
“The latest data makes the case that we’re going to have to toughen up… there’s absolutely no appetite for letting Russia just keep doing this,” the official said.
The $60-per-barrel price cap imposed in December is a key component of efforts by G7 countries and their allies to cut off Russian income sources funding the war in Ukraine.
Oil and gas sales have made up more than 28% of Russian budget proceeds this year, bringing the country 1.6 trillion roubles ($17.63 billion) in revenues last month alone.
Despite difficulties with enforcing the price cap, Western officials told FT that they were committed to keeping the limit in place, with a U.S. Treasury official saying the sanctions have forced Russia to sell its oil without Western insurance or shipping, which has inflicted a “great cost” on Russian profits.
Since the price cap was imposed in December 2022, companies based in the EU, G7 countries and Australia have been banned from providing services enabling maritime transport, such as insurance, with Russian oil above the $60-per-barrel limit.
G7 countries provide insurance services for 90% of the world’s cargo and the EU is a major player in sea freight.
AFP contributed to this reporting.