The price ceiling for Russian oil does not work – Western insurers

Western insurance experts admit that the price ceiling for Russian oil does not work. The restrictions have prompted more vessels to join the fleet illegally transporting Rosneft.

Such a statement regarding the invalidity of the price ceiling was made by a group of Western insurers, writes Reuters.

International group P&I said the price cap has not had much success since it was introduced two years ago because Russia uses its own fleet as well as tankers outside Western control.

The restriction allows Western shippers and insurers to trade Russian oil from December 2022, as long as the oil sells for less than $60 a barrel.

However, the Russian Federation bypasses the price ceiling of $60 and sells oil at a higher price.

“Capping oil prices is becoming increasingly unfeasible as more vessels and related service providers participate in this parallel trade. We estimate that around 800 tankers have already left The International Group of P&I Clubs (Insurance Bureau in London, England – ed.), as a direct result of the introduction of the oil price cap,” P&I said in a statement.

As previously reported by USM, in April, oil exports by sea from Russia rose to an 11-month high and amounted to 3.95 million barrels per day.