Russia’s ESPO crude oil traded below the G7’s $60/barrel price cap for the first time ever this week, dragged down by Brent’s collapse to 2021 lows and mounting global oversupply concerns. The breach could ease shipping logistics but slash Moscow’s energy revenues.
Key Developments:
📉 Price Plunge: ESPO Blend traded at 56−57/barrel FOB Kozmino∗∗on April7,∗∗3 below the cap, per Reuters sources.
🚢 Sanctions Relief: Sub-$60 prices may help Russian sellers secure tankers/insurance without violating G7 rules.
💸 Revenue Hit: Weak prices offset any logistical gains, further straining Russia’s war economy.
Why It Matters:
Brent’s Domino Effect: ESPO’s drop follows Brent’s 2.1% crash to $64.21—lowest since April 2021.
Price Cap Loophole Closed: ESPO had mostly traded above $60 since 2022, often using shadow fleets to bypass sanctions.
OFAC’s Watchlist: The U.S. previously flagged ESPO for potential cap violations; sub-$60 trades reduce enforcement risks.
Market Reaction:
Rystad Energy: Warns ESPO could “stabilize below $60” if Brent weakness persists.
Traders: Note cheaper ESPO may boost Chinese/Indian buying, but at the cost of lower Russian profits.