LONDON, July 19 — The price cap on Russian crude oil, a central plank of Western sanctions since December 2022, claims to cut Moscow’s war revenue without spiking global supply. The catch is, it has given birth to a vast shadow fleet that keeps Russian barrels moving, and the numbers show the Kremlin still rakes in tens of billions. Here is the mechanism the G7, the European Union and Australia designed: a $60 per barrel ceiling.
Any oil sold above that price is barred from Western shipping and insurance services. The logic was straightforward – cap Russia’s earnings, but keep its production flowing to avoid a world oil shock.
On closer reading of the revenue data, the effect looks real but far from crippling.
The revenue picture: down, not out
Follow the money. Russia’s oil and gas revenues stood at an estimated $120 billion in 2022, the year the full‑scale invasion of Ukraine began. In 2023, that figure fell to $33.7 billion.
In 2024, it was roughly $32.5 billion, according to source figures. That is a dramatic drop from the peak, but it remains a substantial war chest.
The cap has clearly bitten, but not severed the artery. The mechanics of the evasion are straightforward. Russia has assembled a shadow fleet – uninsured tankers – and shifted sales to non‑Western buyers in China, India and Turkey.
These countries do not enforce the price cap. The result: Russia sells its crude at a discount of about $10 to $15 per barrel below the global benchmark, but still above the $60 ceiling.
So the cap functions as a discount mechanism, not an outright embargo.
Shadow fleet and the Western response
The United States Treasury and the EU have responded by slapping sanctions on entities involved in shadow‑fleet operations. The source notes that over 100 vessels and several trading companies have been targeted. In February 2025, the EU adopted its 16th sanctions package, which specifically went after shadow‑fleet tankers and their insurers.
The aim is to raise the cost of circumvention, to make the shadow fleet riskier and more expensive to operate. Yet critics argue the cap’s effectiveness is undercut by Russia’s ability to maintain high production levels and simply redirect its export routes.
The shadow fleet may be inefficient and dangerous, but it keeps revenue flowing. The catch is that stricter enforcement risks driving up global oil prices, frustrating the cap’s own design of maintaining stable supply.
What to watch next
As of mid‑2026, the next moves are likely to involve tighter tracking of shadow‑fleet insurance and port access. The EU
