Price Cap or Invisibility Cloak? Russia's Oil Exports and Their Price

Western countries want to reduce Russia's revenues from oil exports. To this end, the EU and G7 states in early December 2022 decided on a price cap for crude oil that Russia brings to the world market by ship. Shipowners, technical service providers, financial service providers, and insurers from these countries are only allowed to participate in oil exports from Russia if the price achieved is no more than $60 dollars per barrel. Official figures give the impression that the mechanism is working. Russia was said to be selling crude oil at an average of $47 a barrel as of January 2023. In fact, however, it can be assumed that the Russian companies are achieving prices between $70 and $75 per barrel in the important market of India. The market for shipping services is so opaque that regulations can be circumvented and revenues directed to shadow accounts.