By Petras Katinas & Vaibhav Raghunandan

Vessel sanctions bite seaborne flows, as Russian oil transported on G7+ owned/insured tankers rises by 15% month-on-month

Key findings

In February, Russia’s monthly fossil fuel export revenues dropped 3% month-on-month, at EUR 640 mn per day.
The five largest Russian fossil fuel importing countries in the EU paid Russia a total of EUR 1.3 bn for their imports, over half of which were purchases of LNG.
356 vessels exported Russian crude oil and oil products in February, of which 167 were ‘shadow’ tankers.
The most notable development was a sharp drop in oil shipments via ‘shadow’ fleet tankers, which fell by 21% compared to January. In contrast, oil transported via G7+ owned or insured vessels rose by 15% over the same period. This shift suggests that US sanctions imposed by the Office of Foreign Assets Control (OFAC) in January may have had a tangible impact on Russian oil flows.
A lower price cap of USD 30 per barrel would have slashed Russia’s oil export revenue by 41% (EUR 136 bn) from the start of the sanctions in December 2022 until the end of February 2025. In February alone, a USD 30 per barrel price cap would have slashed Russian revenues by 40% (EUR 4.26 bn).
Since the introduction of the oil price cap until the end of February 2025, thorough enforcement of the price cap would have cut Russia’s export revenues by 12% (EUR 40.4 bn). In February 2025 alone, full enforcement of the price cap would have reduced revenues by 12% (approximately EUR 1.2 bn).

Trends in total export revenue

In February, Russia’s monthly fossil fuel export revenues dropped 3% month-on-month, being valued at EUR 640 mn per day. This was partly due to a decline in oil exports.
Revenues from seaborne crude oil decreased by 13% month-on-month to EUR 188 mn per day, while export volumes dropped by 9%.
Revenues from crude oil via pipeline saw a minor 2% increase in February to EUR 86 mn per day.
There was a 13% surge in Russian revenues from LNG to EUR 52 mn per day in February, and volumes increased by 9%.
After a drop in January, Russian revenues from pipeline gas increased by 5% in February to EUR 70 mn per day. Volumes of pipeline gas exports also increased by 1%.
Revenue from seaborne oil products marginally increased by 1% month-on-month to EUR 192 mn per day.
Russian revenues from coal exports continued to slide, dropping by 6% month-on-month to EUR 51 mn per day.

Who is buying Russia’s fossil fuels?

Coal: From 5 December 2022 until the end of February 2025, China purchased 45% of all Russia’s coal exports. India (18%), Turkey (10%), South Korea (10%), and Taiwan (5%) round off the top five buyers list.
Crude oil: China has bought 47% of Russia’s crude exports, followed by India (38%), the EU (6%), and Turkey (6%).
Oil products: Turkey, the largest buyer, has purchased 25% of Russia’s oil product exports, followed by China (12%), and Brazil (11%).
LNG: The EU was the largest buyer, purchasing 50% of Russia’s LNG exports, followed by China (21%), and Japan (18%).
Pipeline gas: The EU was the largest buyer, purchasing 39% of Russia’s pipeline gas, followed by China (28%), and Turkey (27%).

China remained the largest buyer of Russian fossil fuels in February. Their imports accounted for almost 40% (EUR 5.4 bn) of Russia’s monthly export earnings from the top five importers. Crude oil comprised 70% (EUR 3.8 bn) of China’s imports from Russia.
In February, India was the second-largest purchaser of Russian fossil fuels, importing commodities valued at EUR 3.83 bn. Crude oil accounted for 77% of these imports.
Turkey was Russia’s third-largest importer of fossil fuels, contributing 18% (EUR 2.5 bn) of the total export earnings from its top five importers.
The EU was the fourth-largest buyer of Russian fossil fuels, with its imports accounting for 14% (EUR 1.7 bn) of the top five purchasers. Almost half of these imports were Russian LNG, valued at EUR 861 mn.
Brazil bought EUR 594 mn of Russian fossil fuels in February, which consisted entirely of oil products.

In February, the five largest Russian fossil fuel importing countries in the EU paid Russia a total of EUR 1.3 bn for their imports, over half of which were purchases of LNG. The EU has granted an exemption for Russian crude oil imported through the southern branch of the Druzhba pipeline to Hungary, Slovakia, and the Czech Republic. While Russian pipeline gas and LNG remain unsanctioned, the pipeline transit through Ukraine ended in December 2024, terminating Gazprom’s gas deliveries to Slovakia, Czechia, and Austria.
France was the largest importer of Russian fossil fuels within the EU. Its imports, which included Russian LNG, totaled EUR 399 mn. However, the fact that this gas is imported via France does not necessarily mean it is consumed there. A recent study indicates that some Russian LNG entering France through the Dunkerque terminal is delivered to Germany.
Hungary was the second-highest importer, purchasing EUR 307 mn of Russian fossil fuels in February. These included crude oil (EUR 191 mn) and gas via pipeline (EUR 117 mn).
Belgium was the third largest importer, exclusively importing LNG valued at EUR 266 mn. While gas consumption in Belgium decreased by 11% month-on-month, exports from Belgium to other Member States rose by 60% over the same period, suggesting that some Russian LNG may not have remained in the country.
Slovakia, the fourth-largest buyer within the EU, imported Russian fossil fuels worth EUR 253 mn. 70% of Slovakia’s imports were Russian crude oil via pipeline, valued at EUR 175 mn. Russian crude oil is refined into oil products and reexported to Czechia. This can continue because Slovakia’s exemption from the ban on exporting oil products made from Russian crude, which ended in December 2024, has been extended until June 2025.
Czechia was the fifth-largest importer of Russian fossil fuels, importing crude oil valued at EUR 132 mn.

How are oil prices changing?

In February, the average Urals spot price saw a minor 0.72% rise and remained above the price cap, trading at USD 70.76 per barrel.
The price of Sokol blend of Russian crude oil saw a 3.8% rise to USD 72.85 per barrel. Both these grades are primarily associated with sales to Asian markets.
CREA has stopped projecting and analysing prices of and discounts on ESPO grade crude oil as pricing data for the commodity has been unavailable for over six months.

In February, the discount on Urals-grade crude oil increased 7.4% month over month to an average of USD 5.8 per barrel compared to Brent crude oil, while the discount on the Sokol blend narrowed by 29% to USD 3.8 per barrel.
Throughout this period, vessels owned or insured by G7+ countries continued to load Russian oil in all Russian port regions, where average exported crude oil prices remained above the price cap level. These cases call for further investigation by enforcement agencies into breaches of sanctions.

The growth of ‘shadow’ tankers reduces G7+ shipping industry’s leverage over Russia

Russia’s seaborne crude oil exports declined by 9% month-on-month in February. However, the most notable development was a sharp drop in shipments via ‘shadow’ tankers, which fell by 21% compared to January. In contrast, oil transported via G7+ owned or insured vessels rose by 15% over the same period.
Overall, the situation appears to be improving, with ‘shadow’ tankers accounting for just 56% of total crude oil shipments in February — down from 65% in January. The share of crude oil exports using these vessels fell from 85% to 75%, while refined product shipments via the shadow fleet declined from 40% to 32%.
This shift suggests that US sanctions imposed by the Office of Foreign Assets Control (OFAC) in January may have had a tangible impact on Russian oil flows.

‘Shadow’ tankers pose significant risks to ecology & impact of sanctions

In February, 356 vessels exported Russian crude oil and oil products, of which 167 were ‘shadow’ tankers. 38% of these ‘shadow’ tankers were at least 20 years old or older. The oldest tanker transporting Russian oil in February was more than 30 years old.
Older ‘shadow’ tankers transporting Russian oil and petroleum products across EU Member States’ exclusive economic zones, territorial waters, or maritime straits raise environmental and financial concerns due to their age, questionable maintenance records, and insurance coverage. Their insurance potentially lacks sufficient protection & indemnity (P&I) coverage to cover the cost in the event of an oil spill or other catastrophe. In the case of accidents, coastal countries may bear the financial brunt of the cleanup, not to mention the repercussions of damage to their marine ecology.
The cost of cleanup and compensation resulting from an oil spill from tankers with dubious insurance could amount to over EUR 1 bn for coastal country’s taxpayers.

An average of EUR 93 mn per day of Russian oil underwent ship-to-ship (STS) transfers in EU waters in February. 40% of these transfers were facilitated by tankers covered by G7+ insurance.

How can Ukraine’s allies tighten the screws?

Russia’s fossil fuel export revenues have fallen since the sanctions were implemented, subsequently constricting Putin’s ability to fund the war. However, much more should be done to limit Russia’s export earnings and constrict the funding of the Kremlin’s war chest. This includes lowering the oil price cap, increasing monitoring and enforcement of sanctions, and banning unsanctioned fossil fuels such as LNG and pipeline fuels that are legally allowed into the EU.

Lowering the oil price cap

A lower price cap of USD 30 per barrel (still well above Russia’s production cost, which averages USD 15 per barrel) would have slashed Russia’s oil export revenue by 41% (EUR 136 bn) from the start of the sanctions in December 2022 until the end of February 2025. In February alone, a USD 30 per barrel price cap would have slashed Russian revenues by 40% (EUR 4.26 bn).
CREA’s estimates of the impact of a revised and lowered price cap have been updated in this edition. These numbers are a more accurate representation of the losses in revenue Russia would incur. Our earlier numbers severely underestimated the impact of a lower price cap, due to a bug that we identified which mislabelled commodities in our model.
Lowering the price cap would be deflationary, reducing Russia’s oil export prices and inducing more production from Russia to make up for the drop in revenue.
Since introducing sanctions until the end of February 2025, thorough enforcement of the price cap would have cut Russia’s export revenues by 12% (EUR 40.4 bn). In February 2025 alone, full enforcement of the price cap would have reduced revenues by 12% (approximately EUR 1.2 bn).

Restrict the growth of ‘shadow’ tankers & plug the refining loophole

Russia’s reliance on tankers owned or insured in G7+ countries has fallen due to the growth of ‘shadow’ tankers. This subsequently impacts the coalition’s leverage to lower the price cap and hit Russia’s oil export revenues. Sanctioning countries must prevent Russia’s growth in ‘shadow’ tankers that are immune to the oil price cap policy.
G7+ countries must also plug the widening refining loophole by banning the importation of oil products produced from Russian crude oil. This would enhance the impact of the sanctions by disincentivising third countries from importing large amounts of Russian crude and helping cut Russian export revenues. Banning the imports of oil products from refineries that process Russian crude oil would also lower the price of Russian oil, as they would struggle to find buyers or expand their market.

Stronger enforcement & monitoring

Enforcement agencies overseeing the sanctions must take proactive measures against violating entities, including insurers registered in price cap coalition countries, shippers, and vessel owners.
Despite clear evidence of violations, agencies must do more to enforce penalties against shippers, insurers, or vessel owners. This information must be shared widely in the public domain. Penalties against violating entities increase the perceived risk of being caught and serve as a deterrent.
Penalties for violating the price cap must be significantly harsher. Current penalties include a 90-day ban on vessels from securing maritime services after violating the price cap, a mere slap on the wrist. If found guilty of violating sanctions, vessels should be fined and banned in perpetuity.
Sanctions enforcement bodies must continue to sanction ‘shadow’ tankers as doing so hinders Russia’s ability to transport its oil above the price cap. CREA estimates that the Office of Foreign Assets Control (OFAC)’s initial sanctioning of ‘shadow’ tankers widened the discount that Russia offered buyers of its oil and cut Russia’s crude oil export revenues by 5% (EUR 512 mn per month).
The lack of proper monitoring and enforcement along with rising oil prices have increased Russia’s export revenues to fund its war against Ukraine.
The G7+ countries should ban STS transfers of Russian oil in G7+ waters. STS transfers undertaken by old ‘shadow’ tankers with questionable maintenance records and insurance pose environmental and financial risks to coastal states and support Russia in logistically exporting high volumes of crude oil. Coastal states should require ‘shadow’ tankers transporting Russian oil through their territorial waters to provide documentation showing adequate maritime insurance. If ‘shadow’ tankers fail to do so, they should be added to the OFAC, UK, and European sanctions list. This policy could limit Russia’s ability to transport its oil on ‘shadow’ tankers, exempt from complying with the oil price cap policy.

Relevant reports:

Note on methodology:
Update 2023-10-19 – We now use Kpler to estimate seaborne exports from Russia and other countries. This change increases our tracker’s estimate of exports from Russia to the world by EUR 77.8 bn (+18% increase) and the exports to the EU by EUR 12.4 bn (+2.8% increase).
We have also changed how we receive protection and indemnity (P&I) insurance information about ships to obtain data directly from known P&I providers and Equasis. This ensures we have recorded the correct start date for a ship’s insurance.
Find out more details on the changes in our methodology, which are explained in our article about the migration from automatic identification system (AIS) data providers to the Kpler dataset.
The data used for this monthly report is taken as a snapshot at the end of each month. The data provider revises and verifies data on trades and oil shipments throughout the month. We subsequently update this verified data each month to ensure accuracy. This might mean that figures for the previous month change in our updated subsequent monthly reports. For consistency, we do not amend the previous month’s report; instead, we treat the latest one as the most accurate data for revenues and volumes.
Calculating the impact of sanctions: We estimated the impact of the EU/G7 crude oil ban and price cap by estimating the price of Urals in the absence of the cap and Russia’s invasion of Ukraine. We do this by first calculating the average difference between the spot prices of Brent and Urals in the year before the invasion. This average difference is used to estimate an expected price of Urals based on the current value of Brent since the start of the price cap. We use this expected price of Urals and the current price of Urals, along with the volumes of Urals traded from Kpler, to estimate the difference in the total value of Russia’s exports.