This article is very interesting, revealing many aspects of the international trade in oil. The shadow market for oil from Russia is growing, but there’s probably a limit for it. Some tanker owners and operators will be comfortable with the idea of not using their AIS, and not using the major international P&I clubs and insurance firms. They may use older ships, which are more prone to risk, and are less efficient. They may resort to ship-to-ship transfers, since many large tankers cannot enter ports that are available to them for the shadow shipments. These transfers are inherently riskier, both from accident and pollution standpoints, and will probably lead to accidents.
So Russia may be able to move petroleum, but there may be less cash flow for Russia, and there may be a reduction in overall trade with Russia. These outcomes are what sanctions are trying to create.
Greg Miller·Thursday, December 01, 2022Could Russia sanctions work in practice even if they fail on paper?