Russia's crude oil exports reached approximately 4.3 million barrels per day in July, with 36.2% transported by vessels associated with the G7 and its allies, a further increase from 34.4% in June and a one-year high. Greek shipowners transported 26.4 million barrels that month, the highest in nearly three years.
The key factor behind this is that Russian oil was previously too cheap. The average price of Urals at the port of Primorsk fell to $52.93 per barrel in July, and as low as $39.72 on July 2nd. This allowed more transactions to meet Western price cap rules, giving legitimate shipowners an incentive to win back business from "shadow fleets." Meanwhile, the EU imposed sanctions on 41 vessels associated with shadow fleets in July, and the IMO began strengthening verification of vessel registration and sanctions, further increasing the cost of grey transportation.
The increased proportion of G7 vessels does not equate to a relaxation of sanctions against Russia; rather, it's more like the price cap mechanism is starting to function again: allowing Russian oil to continue entering the global market, but bringing more transportation back into a regulated system. With Urals rebounding to $61.48 on August 7, this round of G7 shipowner repatriation may not be sustainable.
