Threats by Russian president Vladimir Putin to cut oil exports to those abiding by a price cap on its fuel have been downplayed by experts.
As over 90% of the world’s oil tankers are owned or insured by western countries through the International Group of Protection and Indemnity Clubs, Russia is limited to a “shadow fleet” to carry its oil.
Russia is believed to have around 100 ships in this fleet, but will need over 240 if it is to match its 2021 supply of 4.7mln barrels each day, outlined Rystad Energy analysts.
As well as this, tankers need “the requisite insurance,” otherwise “no terminal is willing to accept them,” according to Liu Gan from the Eurasia Institute of China’s State Council.
Shipping channels are also closed off to vessels without the required insurance, including the Suez Canal and the Danish straits.
Moscow, therefore, has exported millions of barrels of crude oil using tankers insured in the west since the price-cap came into effect, according to the Financial Times, implying its continued reliance on such vessels.
This oil, in ships bound to Indian refineries, has also apparently been sold under the price cap, said the FT.
European Union and G7 nations, alongside Australia all capped the price of Russian crude oil to US$60 per barrel from 5 December, meaning they would not accept prices over this.
Previous threats from the Russian president came in March when he said he would cut oil exports unless countries paid in roubles in an attempt to prop up the currency which had been faltering since its invasion of Ukraine began.
Following the invasion, which was launched in February this year, it has also faced an influx of sanctions from countries opposing the aggression.
According to the European Commission, some €300bn worth of Russia central bank reserves have been frozen across the continent, while €19bn in personal wealth has also been seized.