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| Russia is using a “ghost fleet” of old tankers to transport oil and evade restrictions. (Source: Reuters) |
The move marks an escalation in Western efforts to enforce a $60-a-barrel price ceiling on Russian seaborne oil, imposed to punish Moscow over the conflict in Ukraine.
The price cap is intended to reduce Russia's export revenue while maintaining the flow of oil around the world . The mechanism prohibits Western companies from providing maritime services such as transportation, insurance and finance that facilitate Russia's oil sales above the price cap.
Russia is using a “ghost fleet” of aging tankers to transport oil and evade restrictions. The fleet is shipping oil to countries including China and India that are much farther away from Moscow’s traditional customers and driving up shipping costs.
According to Lloyd's List Intelligence - a company that specializes in tracking shipping activities - and oil market analysts, Panama, the Republic of the Marshall Islands and Liberia have allowed some of the above ships to fly the flags of these three countries.
The practice, known as “flag hopping,” allows some of the front companies set up to trade Russian oil to ship these ships and evade sanctions. Nearly 40 percent of the roughly 535 tankers in the “ghost fleet” are registered through companies set up in the Marshall Islands.
Sources confirmed that Lindsey Whyte, head of the international finance department at the UK Treasury , John Berrigan, head of the financial services department of the European Commission, and Brian Nelson, the US Treasury undersecretary for counterterrorism and financial intelligence, had signed letters warning the three countries about the increasing circumvention of the G7 price cap on Russian oil, as well as the high level of risk associated with uninsured ships and other Western services.
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