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Russian oil export revenue surpasses pre-war levels - Bloomberg

Russian oil export revenue surpasses pre-war levels - Bloomberg Photo: Russia's monthly oil export revenue exceeds pre-war levels (Getty Images)

The monthly income of the Russian Federation from oil exports is currently higher than before the invasion of Ukraine. This underscores the failure of Western measures to limit its military budget, writes Bloomberg.

The shadow fleet of Russia

The publication notes that the failure of Western sanctions on Russian oil exports can be observed by sailing from the Greek coastal town of Gytheio, where two oil tankers with rusty hulls, both 57 years old, stand just a few meters apart.

The owners of the vessels and the insurer are unknown. They sail under a flag considered a "very high-risk" by authorities. The destination of the profits from trading Russian fuel remains a mystery.

Digital tracking systems showed how the 26-year-old Turba sailed over four miles (about 6.4 km) while the 900-foot (3000 meters) Simba transferred its fuel cargo to a smaller vessel in the presence of a Bloomberg filming crew.

On that same September day, when this transfer took place ship-to-ship, more than a dozen similar vessels were floating nearby - part of a massive shadow fleet doing the same or preparing to do so.

How much Russia could earn from sanctions evasion

The sanctions deal agreed upon a year ago, aimed at reducing Kremlin funding, included limiting the price of Russian sea oil to $60 per barrel, $24 lower than the average market price over the last 12 months.

Instead, it created a profitable business for numerous traders and shipping companies that are difficult to trace. According to trade data collected by Bloomberg, from the moment oil leaves Russia to when it reaches buyers, about $11 billion in oil dollars evaporates annually.

Secondary sanctions are needed

Eddie Fishman, Senior Fellow at the Center on Global Energy Policy at Columbia University, said that shadow fleets and alternatives to Western maritime insurance are not something new. "Iran has been using them for many years. Now, with such a large producer as Russia using them, they have become more widespread," Fishman said.

Despite previous signs that the West is trying to disrupt Russia's bypass routes, the Greek authorities claim to be powerless to prevent this secret maritime activity taking place near the country's coast. The publication also points out that the growing significance of Russia's shadow fleet is evident this year, with about 45% of Russian oil transported through it.

Effectiveness of sanctions

The effectiveness of sanctions has decreased due to inadequate monitoring and adherence to the oil price restriction policy, allowing Russia to sell its oil at prices higher than the established limit, according to the authors.

Furthermore, the "loophole in oil refining" legally allows oil products made from Russian crude oil to enter countries in other regions of the world. This primarily concerns India, which has sharply increased its oil imports from Russia.

Earlier, US Treasury Secretary Janet Yellen stated that Washington is preparing to take tough measures for violating the established oil price ceiling.

In addition, the US government intends to halve Russia's income from oil and gas exports by 2030.