The one-year anniversary of Russia's invasion of Ukraine has seen a spate of “what have we learned” articles in the press. Included in that wave of thought pieces are reflections on the effectiveness of sanctions applied against Russian oil and gas exports. The upshot: traders are finding ways around those sanctions. Some of them in plain sight.
According to a report in Bloomberg, Russian oil tankers are transferring their cargoes to other ships in the comfortable confines of a bay near Greece. And the transfer business is booming:
At least 23 million barrels of Russian crude and additional volumes of refined fuels have been transfered from one tanker to another in the Bay of Lakonikos since the start of this year, according to tanker tracking by Bloomberg. Greek authorities say their scope to intervene is limited because the activity is happening outside of a six-mile limit to the country's territorial waters in the area.
Traders and shipping companies have found a multitude of ways to ensure Russian oil can flow and this is just the latest example. There has been similar activity near Ceuta, a Spanish enclave in north Africa. A vast shadow fleet of tankers has also sprung up to help the country overcome sanctions.
And that's not the only sanction regime Russian oil is avoiding. What about the widely touted oil price cap that was supposed to force Russian oil that does make it to market to sell at a steep discount?
Like all price control regimes, it's not going according to plan:
The price cap “was invented by bureaucrats with finance degrees. None of them really understand oil markets,” Paul Sankey, president and lead analyst at Sankey Research, told CNBC's “Street Signs Asia”…
“It's been a total bomb, it has failed completely.”
It's probably too early to say any sanctions have “failed completely.” But there's also strong evidence that the world's appetite for Russian fossil fuels (particularly in China and India) remains as big as ever.
None of this means the west should abandon sanctions. They are a tool in a wider effort to contain and ultimately defeat Putin's imperial designs. But sanctions are not the killer app that will bring Putin to his knees. The only way to do that is through a Ukrainian victory on the battlefield.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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The only way to defeat Russia may be a Ukraine win but why should the U. S. taxpayers foot the bill? Putin is a paper tiger and Biden isn’t even a paper mouse. Neither are actually good for the countries they are supposed to be leading.
Well said Glenn, I agree 110%. That is exactly what i think, but couldn’t put the thought into words.