Sanctions halt nearly half of Russian oil tankers, intensifying economic blow

In October, the US Treasury Department levied sanctions against the owners of tankers shipping Russian oil. Among those on the "blacklist" is the Russian Sovcomflot NS Leader, which promptly veered off course near the coast of Portugal last week when the US revealed the ship's ownership. The container ship had been en route to a Russian port on the Baltic Sea.

Recall that in December last year, the G7 group resolved that companies within their nations cannot trade Russian oil for more than 60 dollars a barrel. The West employed this tactic to curb the flow of petrodollars to the Kremlin, which the Russians use, among other things, to finance a full-scale invasion of Ukraine. Eric Van Nostrand, acting assistant secretary of the US Treasury for economic policy, believes this limit will foster market energy stability.

Restrictions on refined products were enacted two months later. However, the system met critique in 2023 when Moscow identified a loophole that allowed sanctions to be circumvented. Consequently, Western companies continued shipping oil even when its price surpassed the 60-dollar barrier.

In response, the United States intensified the sanctions and launched investigations into potential infractions of the price ceiling, leading many Greek tanker owners to withdraw from trading, according to Bloomberg.

Russian oil is depreciating over time, confirms Russian Energy Minister Alexander Novak. As per data from the Bloomberg agency, 18 of the 50 ships had collected cargo at the start of October. Seven of the remaining tankers hadn't loaded cargo even before the sanctions were enacted, and another 21 have been idle at their moorings since the bans were implemented.