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London threatens with fines

16 November 2022

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department

Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the Kommersant FM radio station on the possible ways to circumvent the British-developed mechanism for monitoring compliance with the “price ceiling” for Russian oil.

Punitive measures within the framework of the ceiling on Russian oil are planned to be tough, and fines for violation of the limits will reach up to half the cost of the transaction. The alternative penalty is a £1 million fine. Such options for violators were prepared by the UK Treasury.

Sanctions will only apply to companies in the United Kingdom. British carriers and insurers control up to 90% of the market, companies from other countries, such as Greece and Malta, are associated with them. Russian exporters mainly used their services.

However, it is possible to cope with such difficulties, Aleksey Gromov says:

“The tonnage of the fleet, which is owned by Russian companies and insured by Russian insurance companies, is capable of transporting approximately 65% ​​of the total volume of the average export of Russian oil over several years by sea. In addition, they can always agree, for example, to prescribe in the documents the cost formally below the price ceiling, and the costs of insurance can be distributed among the participants in the transaction.”

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department
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