An analysis of Russia’s crude oil exports under the G7 price cap regime reveals a critical shift in the shipping market and differing policies among coalition members.
G7 Price Cap Mechanism
The G7 and its allies implemented a price cap to undermine Russia’s war funding while minimizing disruptions to global supplies.
- Original Cap: The initial threshold, effective December 5, 2022, was set at $60/b (per barrel).
- Lowered Cap: In an effort to tighten sanctions, the EU, the UK, and their allies have since lowered the cap to $47.6/b (as of September 2025).
- US Position: The US has not followed the lower cap and has maintained its threshold at the original $60/b.
- Enforcement: Western firms, including tanker operators and insurers, are banned from facilitating Russian seaborne crude exports unless the oil is sold below the relevant cap.
Rise of Non-Western Tankers
Russia has increasingly relied on non-Western shipping, particularly as the price of its flagship Urals crude has strengthened and sanctions enforcement has become tighter.
- Exemption from Regulations: The price cap regulations do not directly apply to tankers flagged, owned, and operated by companies outside the G7 coalition and not insured by Western protection and indemnity clubs.
- Vessel Profile: These non-price-capped ships tend to be older and less maintained.
- Market Share: Their share in Russia’s crude export market is rising, especially for Pacific crude exports (Sokol, Sakhalin Blend, and Eastern Siberia–Pacific Ocean grades), which are transported by them more often than barrels from the Baltic or Black Sea ports (Urals).
Shifting Shipping Market Dominance
The market for shipping Russian crude has seen a dramatic shift in which nations’ fleets dominate the trade.
- Initial Greek Position: Greek tanker operators, traditionally strong in this market, maintained their position for the first few months after the price cap was introduced.
- New Leaders: They have since given way to firms in the UAE, China, Hong Kong, and the Seychelles, reflecting the rise of non-Western shipping and Russia’s pivot to non-Western trading partners.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: S&P Global
