Sanctions as have been proven with Iran, is always useless.
Allies discuss ways to ‘toughen up’ key sanction as Moscow circumvents limits on seaborne crude
www.ft.com
Almost no Russian oil is sold below $60 cap-say western officials
Allies discuss ways to ‘toughen up’ key sanction as Moscow circumvents limits on seaborne crude
The US-led price cap on Russia’s oil sales is being almost completely circumvented, according to western officials and Russian export data, forcing countries to explore ways to reinforce one of their key economic sanctions against Moscow. One senior European government official said “almost none” of the shipments of seaborne crude in October were executed below the $60-a-barrel limit that the G7 and its allies have attempted to impose. “The latest data makes the case that we’re going to have to toughen up . . . there’s absolutely no appetite for letting Russia just keep doing this,” the official said. EU officials have held discussions in recent days on reinforcing the cap, including options for strengthening enforcement or clamping down on Russia’s access to the used oil tanker market. Concerns among western officials are backed up by official Russian statistics on oil sales in October, which Moscow says shows the average price received was above $80 a barrel. While Russian economic statistics have been questioned during the war, the level recorded is the basis for how much Moscow taxes oil exports. The jump in Russian prices has dealt a blow to G7 efforts to limit the funds flowing to the Kremlin to fund its full-scale invasion of Ukraine, and comes as Kyiv has made only limited progress in its counteroffensive.
G7 members and Australia introduced the price cap measures for crude oil last December, aiming to squeeze Russia’s revenues by cutting off access to western services such as shipping and insurance unless traders abided by the $60 limit. While the measures enjoyed some early success, Russia has proved adept at countering them, building up its so-called “shadow fleet” of ageing oil tankers to circumvent western markets, for example. The average price of Urals, Russia’s main export grade, moved above the $60 limit this summer as oil prices rallied due to supply cuts by Saudi Arabia and Moscow with the wider Opec+ cartel, but a substantial portion continued to trade below that level. But by late September the FT reported that almost three-quarters of all seaborne Russian crude flows travelled without western insurance in August, a key sign that more were starting to circumvent the cap. In October, only 37 of the 134 vessels that shipped Russian oil held western insurance and officials say the number operating below the cap is now likely to be much lower.
European officials are concerned that some western insurance providers have been given false declarations from Russian oil companies or traders, which must provide written assurances the crude is priced below $60. One mechanism by which this has been achieved previously is by inflating shipping costs. Western officials say they remain committed to the price cap, even as they acknowledge few barrels still trade below it.
A US Treasury official said the goal was not just an effort to “make as many barrels of oil as possible travel under the cap”, but also “to change Russia’s incentives in a way that makes it make hard choices”. Shifting to selling oil largely without western insurance and shipping has caused “great cost” to the Kremlin. Jeffrey Sonnenfeld, a professor at the Yale School of Management who has advised the US Treasury on the price cap, said longer journeys for Russian oil tankers, higher insurance premiums, additions to port capacity and new capital expenditures had added about $36 a barrel to the cost of Russian oil sales, limiting Moscow’s profits. G7 members have already started to step up enforcement of the cap. Last week the UK sanctioned Paramount Energy & Commodities DMCC, a Dubai-based trader, saying it had been “used by Russia to soften the blow of oil-related sanctions”. The US Treasury department this month requested information from 30 ship management companies about 98 vessels it suspects of violating the cap, a person familiar with the matter said. The request was first reported by Reuters. Of the 30 ship management companies contacted, 17 of them were in G7 price-cap coalition countries. Six were in the UAE, with others in India, Turkey, China, Hong Kong and Indonesia, a person familiar with the matter said.
The price Russia is getting for its oil is still below Brent, the crude benchmark which averaged $89 a barrel in October. But Russia has been able to reduce the discount offered on its oil from as much as $40 a barrel earlier this year to less than $10 a barrel last month. The price cap was designed to keep Russian crude flowing in global markets, as G7 members tried to avoid a supply crunch and price spike that would benefit Moscow. Western policymakers facing elections are also keen to keep prices in check to help tame inflation. US President Joe Biden, who faces a probable re-election battle against former president Donald Trump next year, has vowed to try to keep pump prices down in the world’s largest oil consuming country. Russia has also placed restrictions on exports of refined fuels, blaming domestic shortages but raising fears Moscow could weaponise oil supplies. Additional reporting by Henry Foy in Brussels and Ian Johnston in London.
Allies discuss ways to ‘toughen up’ key sanction as Moscow circumvents limits on seaborne crude
www.ft.com
announced that they will provide spare parts for Ukrainian F-16s to be repaired with. A multi-national coalition is creating a repair hub in Poland, keeping the aircraft as close to Ukraine as possible for return speedy return to service.
announced a new 100 million military aid package for Ukraine today. The contents of the package were not disclosed as has been customary with Finnish war aid to this point. 
announced that they will spend 2 billion Euros on Ukrainian military aid in 2024, which is roughly 25% more than what they donated in 2023. This is of importance because Germany 
also upped their military aid to Ukraine recently, from $4 billion to $8 billion. The Europeans keep stepping up. 
and Italian 
officials discussed additional military aid for Ukraine, as well as joint production of weapons. Note that Italy does not discuss its military transfers publically, therefore, it's likely that more aid was committed, but we'll find out the details later. 
and Germany 
). We also learned that in September, Finland 
, Belgium 
and the Netherlands 
get into 2024, where they'll have fresh budgets for war spending to aid Ukraine.
and Australia 
combined to send Ukraine 190 M777 howitzers in 2022. Since then, as expected, they've faced attrition from Russian drone strikes and counter battery fire. According to the Oryx blog, at least 46 of the M777s have been destroyed, with 34 additional listed as damaged. Some if those will have been repaired in Poland and sent back into conflict. Best estimates are that Ukraine has approximately 120-130 of the M777s sent left in their inventory.
