Russian shadow float: effective response to sanctions

Russia is effectively building a " shadow flute" that allows it to minimize the effects of Western oil sanctions, as confirmed by the latest report of the KSE Institute, operating at the Kiev School of Economics.

Bloomberg notes that during the first half of the year 74 new tankers were involved in Russian oil transport, which had not previously participated in such operations. This significantly exceeds the number of 49 units that have been sanctioned, which explains why discounts on Russian oil remain stable.

The KSE Institute, known for its unequivocal support for harsh sanctions against Moscow, underlines that thanks to this strategy Russia managed to keep the potential tonnage of its fleet unchanged. Consequently, no restrictions the capacity of this "shadow float" allows the export profits to be stabilised despite continuous pressure from the West.

Data Argus Media Ltd. indicate that the average export price of Russian oil last week was only about $12.50 lower than the Dated Brent benchmark, which is the smallest difference since October. This is a clear signal that Russia effectively manages its resources without allowing prices to fall further.

The KSE report also points to a similar trend for ships transporting refined fuels. More than 100 new units, which did not carry Russian oil in 2023, began operations in the first half of this year. This figure is well above the number of sanctioned units, which further underlines Russia's ability to adapt to international restrictions.

These actions show how complex and multi-layered Russia's actions are on the international stage, as well as how effectively Moscow counters sanctions, maintaining its influence on the global oil market.

Source: Bloomberg/MD

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