The USA aims to target the Kremlin's weakest point. Seeking solutions
The Russian shadow fleet, serving as Moscow's tool to evade Western sanctions, might be running into significant issues. The US seems to have discovered a strategy to disrupt its operations, involving steps that could cause substantial inconvenience to Vladimir Putin's regime.
5:15 PM EST, November 6, 2023
The Kremlin hasn't ceased its attempts to dodge Western sanctions for its profit from oil exports. Russia is primarily expanding its so-called shadow fleet. Nevertheless, the USA is set to put an abrupt halt to this strategy.
As cited by "The Moscow Times", Washington has shared a list of potential actions with port operators. These actions could escalate the costs incurred by Russian ships. The US suggests, among other things, an obligation for the ships to prove their insurance's financial security. However, these recommendations may not necessarily be enforced by the ports.
Moreover, the authorities are formulating measures to ensure oil traders' compliance with the existing sanctions. In October, they imposed a sanction on two tankers, prohibiting Americans from trading with them. These ships engaged American financial services, despite purchasing Russian oil below the sanction threshold of 60 dollars per barrel.
The rigorous enforcement of sanctions could either compel Russia to increase its oil sales within the limit or bear extra logistics costs. This, in turn, would cause a rise in shipping rates which have already skyrocketed due to US sanctions.
Post-effectiveness of the price cap
Western countries established a price cap on Russian oil at 60 dollars per barrel, which used to be effective, but the emergence of the "shadow fleet" altered the scenario. Argus Media reports that, currently, Urals oil retails at 74 dollars per barrel.
In October, the Kremlin registered oil and gas revenues totaling 1.6 trillion rubles (approximately 21.53 billion USD). This is the highest figure in the past one and a half years.
