Russia May Have Earned $1.2 Billion By Exploiting Oil Price Cap Loophole

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Russian producers have been selling their crude oil to India at prices below the G7 price cap of $60 per barrel, but since shipping costs are not included in this price ceiling, Russia has been overcharging for freight costs and getting more revenue from oil trade, a Financial Times analysis showed this weekend.



FT has analyzed the fees and charges on tankers leaving the Baltic Sea ports in Russia for India. The findings suggest that the overcharging for shipping costs, plus the fees for Russia-linked tankers, may have boosted Russia’s oil trade revenues by a combined $1.2 billion in May, June, and July.

The loophole in the price cap is that it does not include freight costs. So Russian sellers, traders, and Russia-linked tanker operators have been overcharging for the shipping of the crude, inflating Russian revenues from oil sales despite the fact that it appears that the cargoes were sold below the price cap.


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In June, India’s crude oil imports from Russia were estimated to have been the cheapest since the Russian invasion of Ukraine.

  • Russia may have earned an additional $1.2 billion in the three months to July by exploiting a loophole in the G7 oil price cap.
  • While Russian producers have been selling their crude to India at below the price cap, they have overcharged for shipping costs.
  • Russia’s export revenues rose by $2.5 billion from June but they were $4.1 billion lower compared to July 2022.

The average cost of a barrel of Russian crude that landed at India’s ports in June was at $68.17, per data from India’s Ministry of Commerce and Industry cited by Bloomberg. The price exceeds the $60 price cap set by the G7, but the cap does not include shipping.  

Most of India’s purchases of Russian crude oil are being done on a delivered basis inclusive of freight, insurance, and other costs.

Russia’s crude oil and refined products exports remained steady at some 7.3 million barrels per day (bpd) in July, while higher oil prices and narrower price differentials for Russian crude pushed Moscow’s revenues higher compared to June, according to estimates by the International Energy Agency (IEA).

Russia’s export revenues, at $15.3 billion in July, rose by $2.5 billion from June, but they were $4.1 billion lower compared to July 2022, the agency’s estimates showed.

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