The European Union (EU) is looking to intensify sanctions on the Russian oil industry as part of Western sanctions against Moscow for its invasion of Ukraine.
Despite the initial sanctions not achieving their intended goals, the European Commission is reportedly working on stricter measures to monitor and regulate Russian oil exports, according to the German news agency (DPA).
The new measures aim to reduce the ability of maritime shipping companies to circumvent these sanctions in the future.
By the end of this year, as part of the EU’s twelfth round of sanctions against Russia, it is expected that rules on the price cap will be tightened. These new sanctions include a proposal to restrict the trade of diamonds in Russia.
Under the current rules, maritime shipping companies are prohibited from transporting Russian crude oil to countries outside the EU if the oil price exceeds the maximum limit of $60 per barrel, set by the G7. Simultaneously, the EU generally bans the import of Russian oil.
Current regulations allow Western shipping companies to transport Russian oil to countries like India, China, and Egypt. These rules also apply to other services such as insurance, technical support, financing, and brokerage services for maritime transport.
The initial objective of setting a price cap on Russian oil exports was to reduce Russia’s oil revenues while avoiding a severe shortage in global oil supplies that could result from a complete ban on Russian oil exports.
However, researchers from the Kyiv School of Economics indicate that over 99% of Russian oil exports in October were sold at prices higher than $60 per barrel, highlighting the challenge of enforcing these caps effectively.
