In October, Russia’s net oil revenue reached $11.3 billion. This is the highest number since May 2022, surpassing any month in the year before the invasion of Ukraine.
Russia now receives more from oil exports than before the invasion of Ukraine. Shipowners and traders helped Moscow bypass the oil price cap. This was stated in a Bloomberg article published on Wednesday, December 6.
According to the publication, about $11 billion annually “evaporates” between the moment oil leaves Russia and the moment it reaches consumers.
It has been noted that Russia’s revenues from petrodollars have almost doubled. Thus, in October 2023, net oil revenues amounted to $11.3 billion or 31% of the total revenue of the state budget for the month. This is the highest number since May 2022, surpassing any month in the year before the invasion of Ukraine.
The $60-a-barrel price cap on Russian sea oil, imposed to cut Moscow’s profits, has fueled a lucrative business for dozens of traders and shipping companies that are difficult to track.
As Eddie Fishman, a senior fellow at Columbia University’s Center for Global Energy Policy, says, shadow fleets and alternatives to Western marine insurance are nothing new. Iran has been using them for years. Now the Russian Federation is practicing this possibility.
About 45% of Russia’s oil was transported this year with the help of the shadow fleet. And together with internal shadow fleet owners, they moved more than 70% of Russia’s oil cargo in the first nine months of 2023. This allowed Moscow to maintain control over its exports and gradually increase prices.
Since Russia has exported about 3.5 million barrels of oil per day this year, that means about $11 billion is going into so-called supply distribution. Some of these are legitimate shipping costs, but most go through unknown merchants or unknown shipping companies.
“The sanctions were well-intentioned, but they ended up leaving a large fleet of aging tankers operating beyond the reach of Western regulators, likely with poor insurance,” said Ben Cahill, a senior fellow at Center for Strategic and International Studies.
At the same time, the oil price cap was structured to prevent G7 companies from providing shipping and insurance services to Russia. The EU has banned almost all oil imports from Russia.
It was previously reported that the US Treasury sent letters to 30 companies that control up to hundreds of oil tankers warning of imprisonment in the event of a breach of the price ceiling for Russian oil.
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Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.