Russia finds way to sell its oil at prices higher than G7 and EU price caps

Russian corporations have upped insurance on oil shipments to India to 60%, allowing them to sell oil at prices higher than the US$60 price cap imposed by G7 countries.

Source: Reuters

Details: Through the use of Russian insurers, Moscow can sell oil for more than US$60 per barrel, exceeding the limit imposed by the G7 countries, the European Union and Australia to limit Russia's oil revenues following its invasion of Ukraine.

Over 60% of Russia's offshore oil supply goes to India. Western services such as shipping and insurance can only be used for Russian cargo sold at a price not exceeding a set limit.

Earlier this year, India approved multiple Russian insurance companies to sell maritime shipping insurance after Russia's state-owned National Reinsurance Company provided financial guarantees.

In July, India overtook China as Russia's largest oil consumer, despite China receiving supply via pipelines and sea. After the EU embargo was imposed in 2022, India has been the primary market for Russian oil.

Insurance for the remaining 40% of tankers carrying oil to India in July was provided by Western companies. Russian insurance businesses are mostly used by oil carriers with strong ties to Russia, such as the Russian shipping company Sovcomflot.

The findings suggest that shipping companies from Greece, the United Arab Emirates, and China are more likely to transport Russian oil with Western insurance.

While many Western insurers have ceased covering Russian oil supply for fear of breaching the G7 price cap, some continue to do so.

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