Russia's oil export prices are significantly above the limit despite the western oil price cap. In October, 99 percent of oil exports were shipped at prices above $60 per barrel. According to the KSE Institute in Kiev, analyses of trade data show that the regulation has no effect. Even over the Baltic Sea, where western shipowners and insurers traditionally operate, there are hardly any transports below $60.
The reason for the decreasing percentage of oil transports with Western participation, according to KSE economist Benjamin Hilgenstock, is a tanker fleet built by Moscow, which has so far largely evaded Western access. As a result, the leverage of the West is becoming increasingly limited, although it seems that Western companies are also massively circumventing the regulation itself.
The price cap apparently has weaknesses, but according to Hilgenstock, bold measures should now be taken to restore the functioning of the system. One possibility is that service providers such as shipping companies and insurers must provide more extensive documentation, such as purchase agreements with the actually paid prices and information on transportation costs. The West should also ensure that the certifications are only accepted from reputable providers in order to push dubious intermediaries out of the business.
To avoid accidents and environmental disasters, neighboring countries of important transportation routes such as Denmark could only allow tankers to pass if they are insured by reputable corporations and have a reliable credit rating from a major rating agency. These measures should keep an eye on both the shadow fleet and the issues with the documentation provided by Western service providers in order to prevent evasion options.
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The KSE Institute is part of the Kyiv School of Economics in the Ukrainian capital and, together with international scientists, has been monitoring the effects of the Western price cap on Russia's oil exports for one year. You can find more information about their research work here.
