The price ceiling on Russian oil imposed by the Group of Seven countries is becoming increasingly unenforceable, the organization at the center of the global insurance industry has said, in one of the most direct criticisms of measures designed to deprive the Kremlin of petrodollars, Bloomberg reports, UNN writes.
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About 800 oil tankers that were previously covered by member organizations of the International Group of P&I Clubs have "migrated" to the so-called "shadow fleet," the club said in a written statement in response to a request from the UK government about the effectiveness of sanctions against Russia. In addition, insurers have no way to verify whether traders actually adhere to the price ceiling, the publication writes.
This policy "appears increasingly unenforceable as more ships and related services move into this parallel trade," the group said in a statement. It is "concerned that the increased responsibilities and obligations of companies in the G7 coalition will lead to further migration of trading activities and support services outside the G7.
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It is assumed that companies from the G7 countries will provide their services for the delivery of Russian oil only if the relevant cargoes cost $60 per barrel or less.
This makes the IG Group, the London-based umbrella organization for 12 individual clubs around the world, a central part of these efforts. It continues to protect the vast majority of the world's fleet from risks, including spills.
But as Russia withdraws its vessels from Western control, the need for IG Group members' services is said to be declining. In April, only 16% of all Russian cargo was covered by group members, the lowest figure since at least early 2023, according to shipping data compiled by Bloomberg.
Where the services of the Group of Seven are used, companies must obtain written documentation - the so-called "attestation" - confirming that the oil being transported costs less than $60 per barrel or less.
But the firms have no way of confirming that these testimonies are genuine, and there are many reasons to suspect that they are not, the publication notes.
Published prices for Russia's leading crude, Urals, have been well above $60 per barrel for months, and Russian barrels have continued to move.
The insurance group also criticized the UK sanctions enforcement authorities for some of the due diligence tasks they requested.
The statement said that the group's members "should not be expected to become instruments of coercion" for sanctions. It is also necessary to hold a dialogue between the G7 countries, China and India, given that they are dominant buyers, to ensure that their purchases are compliant, the IG said.
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