Changes

The basic idea is that [[the West]] (G7, EU, [[U.S.]], etc.) wanted to curtail the income that Russia was receiving from the sale of a valuable commodity. In other words, a group of customers were going to stipulate the price of the crude, with no negotiation between themselves and the supplier. That might work if the buyers were the only buyers in the marketplace. The West was confident that they could pressure all of the other buyers worldwide to “fall in line” with their decree. The West was also confident that they could prevent surreptitious behavior of [[market]] participants, i.e., those who might buy Russian crude and mix it with other crudes to mask the identity of the Russian crude.  

The basic idea is that [[the West]] (G7, EU, [[U.S.]], etc.) wanted to curtail the income that Russia was receiving from the sale of a valuable commodity. In other words, a group of customers were going to stipulate the price of the crude, with no negotiation between themselves and the supplier. That might work if the buyers were the only buyers in the marketplace. The West was confident that they could pressure all of the other buyers worldwide to “fall in line” with their decree. The West was also confident that they could prevent surreptitious behavior of [[market]] participants, i.e., those who might buy Russian crude and mix it with other crudes to mask the identity of the Russian crude.  

Several non-Western countries dramatically increased their purchases of Russian crude, and they have taken delivery into their systems. These same countries have also exported crude oil to G7 and EU countries, at prices above the ($60/bbl) price cap. Bear in mind that some countries have historically had purchase agreements for Urals crude at discounts to the market price. So, Russia was able to accommodate a reduction in (direct) sales to the West by increasing sales to existing customers at existing agreed prices.  

Several non-Western countries dramatically increased their purchases of Russian crude, and took delivery into their systems. These same countries then exported crude oil to G7 and EU countries, at prices above the ($60/bbl) price cap. Bear in mind that some countries have historically had purchase agreements for Urals crude at discounts to the market price. So, Russia was able to accommodate a reduction in (direct) sales to the West by increasing sales to existing customers at existing agreed prices.  

The cap only applied to waterborne shipments, so the West pressured vessel owners to refuse carriage of Russian crude if the price cap was violated. They did it by forcing the Marine Insurance industry to refuse coverage to any vessel (or vessel owner) that does not comply with the price cap rules. Marine insurance is an industry that has historically been ruled by the UK's Lloyd’s of London and others. The end result was that several countries stepped into the game and started up their own insurance industries, breaking the monopoly that the West had on Marine insurance. This doesn’t count the so-called “ghost fleet” of older vessels that were put into service to increase the volume capability to carry Urals crude by ship, rather than by pipeline.

The cap only applied to waterborne shipments, so the West pressured vessel owners to refuse carriage of Russian crude if the price cap was violated. They did it by forcing the Marine Insurance industry to refuse coverage to any vessel (or vessel owner) that does not comply with the price cap rules. Marine insurance is an industry that has historically been ruled by the UK's Lloyd’s of London and others. The end result was that several countries stepped into the game and started up their own insurance industries, breaking the monopoly that the West had on Marine insurance. This doesn’t count the so-called “ghost fleet” of older vessels that were put into service to increase the volume capability to carry Urals crude by ship, rather than by pipeline.