Anastasia Gorbacheva18:16, 23.03.24
Dozens of sanctioned ships were unable to pick up their cargo.
The Russian oil export machine that finances the Kremlin’s war against Ukraine is finally grinding to a halt. Moscow has felt the effect of sanctions.
Bloomberg reported that Indian oil refineries will no longer accept tankers owned by state-owned Sovcomflot PJSC due to the risk associated with sanctions.
Since early October, the United States has increased restrictions on the entire fleet of tankers carrying Russian oil. Since then, dozens of sanctioned tankers have been idled in the oceans, and Russian diesel stockpiles are larger than at any time since 2017, according to analytics firm Kpler.
Taken together, these measures could gradually limit Russia’s oil revenues, a key policy goal of the United States and its allies as they seek to prevent military aggression from Vladimir Putin.
The G7 approach to sanctions against Russia is characterized by a rejection of the negative impact on their economies, we are talking about increasing oil prices. Washington came up with the so-called price cap policy precisely in order to soften the sanctions that were being prepared in Brussels, but even after two years of war, Russia continues to export huge amounts of oil.
Since October, the United States has included 40 Russian oil tankers on the list. Four of the recently sanctioned tankers continue to make deliveries, but no sanctioned vessel has picked up cargo since it was added to the US Treasury list.
Now the increasingly tough trade environment has dealt the Kremlin a powerful symbolic blow as India – a staunch trading ally throughout the war – abandons its fleet. At the same time, Ukraine began blowing up Russian oil refineries, although it is unclear how much support there is for this strategy in Washington.
State-owned Sovcomflot will have to look elsewhere for work – and there are signs it is already struggling. At least seven ships stopped in the Black Sea and disappeared from digital monitoring systems. In addition, Sovcomflot admitted that the sanctions harmed its activities.
Despite this, Russia may still use the so-called “shadow fleet” of ships to carry out its deliveries. According to some estimates, there are up to 600 such carriers in operation, along with Greek tankers that continue to serve trade within the G-7 price limit.
The cost of delivering Russian oil is enormous. Shipping cargo across the Baltic Sea to China costs about $14.50 per barrel, according to Argus Media. She estimates that more than half of this amount comes from sanctions.
“Whether this translates into real supply losses will depend on how quickly workarounds are found to solve transportation problems and whether Russian sellers are willing to increase discounts,” said Richard Bronze, head of geopolitics at consultancy Energy Aspects Ltd.
Another obstacle for Moscow was the sale of petroleum products. An average of 6.2 million barrels of Russian diesel were sold in the 10 days to March 17, the highest level since at least 2017, according to Kpler.
Russian oil – latest news
The growth in Russian oil supplies by sea, observed earlier, has not become a long-term trend. Oil export volumes from the Russian Federation decreased by 730 thousand barrels per day – to 2.97 million barrels per day. The total value of Russian oil exports fell from $1.86 billion in the week to March 10 to $1.48 billion in the week to March 17.
(C)UNIAN 2024
Sanctions work. They did not stop the attacker, but they significantly slowed down his ability to attack. The impact on its military logistics is quite strong. Without them Ukraine might already be on its knees. We agree that they are not sufficient.
The real domestic political bomb in Orcland is not of the identity type. We greatly underestimate the homogeneity of the population at the ideological level and its references to the nation. They go far beyond ethnic aspects. This population has only known autocracy and dictatorships of all kinds. The deprivation of freedom and the renunciation of choice is a warm blanket for them. We say that the election was a charade, I think it is the perfect reflection of Russian society in 2024: hypnotized, at attention, in search of the memory of their so-called past “greatness”. Furthermore, the ethnic mixing organized by Moscow throughout Russia has enormously reduced the aspect of identity in the regions.
Conversely, the fractures at the economic level and the weakening of the social fabric as a whole are abysmal. The disparities in terms of resources are unfair and very large depending on the region. In my opinion, they are the ones who will challenge the balance of power. The needs for infrastructure of all kinds are titanic for this country which has focused solely on its hydrocarbon revenues. The brains have left the country and the ecological threats are grandiose with a huge part of the territory threatened by the melting of permafrost. The war economy which will suck up all state revenues will prevent this country from investing in key sectors which could collapse the entire society. We have already seen it this winter, with logistics from another age literally collapsing.
All this requires patience. But it is obviously difficult to speak in these terms when the lives of men, women and children are at stake in Ukraine. Especially when they end up crushed under tons of bricks after yet another terrorist bombing of Moscow.
That the Orc troops are pushed back towards the borders does not mean much if their threat capacity remains solid. The economic aspect, as in many wars, is the key factor.
The only good rule: maintain the sanctions and increase them.