Today, December 5, the sixth package of European Union sanctions against the Russian Federation enters into force. As of today, it is prohibited to provide services for the transportation of Russian oil by sea, as well as its insurance, brokerage services, and financing of operations, CFTS writes.
An exception can be made only if the oil was sold at a price not higher than a certain ceiling. A similar ban is being introduced by the G7 countries (Great Britain, Germany, Italy, Canada, France, Japan and the USA).
"How will limiting the price of Russian oil at the level of $60 per barrel work?" comments Oleg Nivievskyi, professor of the Kyiv School of Economics (KSE). "The scheme looks quite simple (for the importer). You buy below $60 per barrel - you get services from companies of the G7 countries related to maritime trade (insurance, financing etc.). Currently, these companies control 90% of this market. Moreover, this also creates an exception and bans on maritime services (as part of the sanctions package). If you buy by the higher price, look for service somewhere in another country."
"I don't know to what extent this will be an effective mechanism. I think it is partly so, but I also think that the black market will grow, the experience with the Iranian oil embargo is a good indication of this," the expert added.
Also the ban on direct or indirect provided technical assistance, intermediary services, financial services or financial assistance related to transportation, including transshipment from ship to ship, to third countries of oil or petroleum products produced in the Russian Federation or exported from there enters into force.
However, as Interfax writes, from December 5, EU countries will still be allowed to: purchase oil supplied by pipeline from Russia, until the EU Council decides on the introduction of the relevant ban; to purchase oil, if it is not Russian, but only passes through Russian Federation in transit. At the moment, only Hungary voiced an official request for the continuation of oil imports through the Druzhba pipeline.
Russian oil also still goes by pipeline to Poland, Germany, the Czechia and Slovakia. If the supply of oil by pipeline from Russia to a landlocked EU country is interrupted for reasons beyond the control of this country, as an exception, oil from the Russian Federation that arrived in the EU by sea may be sent there.
But this oil should be intended only for this country. Therefore, Hungary falls under such an exception. In addition, the Minister of Foreign Affairs of Hungary, commenting on the EU's approval of the limit price for oil transported from the Russian Federation by sea, stated that Budapest managed to obtain an exception for itself.
Also, until December 5, 2023 (that is, one more year), it is allowed to sell petroleum products produced from oil delivered by the pipeline to the Czech Republic and to buyers in the Czech Republic. This temporary measure will be lifted if alternative suppliers are found.
Also, according to the Russian mass media, Bulgaria has the right to authorize the continuation of sea supply of oil from the Russian Federation until December 2024, if the relevant agreements were concluded before June 4, 2022.
