The Russian oil price cap should be scrapped and replaced with a full ban on trading crude and products, according to a group of 14 NGOs.
The group, which includes Ukraine’s Razom We Stand and London-based Global Witness, said the cap is not working and has failed to limit Russian exports.
The G7 group of nations says the scheme aims to reduce Moscow’s revenues from fossil fuels while keeping oil flowing to prevent global shortages and price volatility. It says both aims have been achieved.
While Russian export volumes have held up, revenues were down 36% last month compared with a year earlier, to $13bn, the lowest for more than two years, according to the International Energy Agency.
The $60-per-barrel price cap on Russian crude was introduced on 5 December alongside a European ban on seaborne imports. Two further caps were introduced for oil products in February.
Oil can continue to flow to countries outside of Europe using EU finance, insurance or vessels, but only if it is sold below the price caps.
The system relies on a system of documented assurances that “officials may occasionally check”, said the group of environmental and justice campaigners.
“There has been no evidence of relevant authorities in any price cap country enforcing any penalties for violations,” it added.
“As a result, it’s unlikely that any trades have taken place beneath the price cap which would otherwise have taken place above it.”
