Japan's finance ministry strengthens policies in response to rising Russian oil prices
Revised and Rewritten Article
With the latest rule update, insurance and shipping firms involved in transporting Russian oil must acquire a compliance certificate for each oil loading — except if the contract specifies prices. Previously, insurance companies were required to obtain such certificates for the entire duration of the contract, regardless of the number of loadings. This new regulation aims to tighten control over adherence to the rules, RIA Novosti reported on February 6.
The G7 countries, joined by Australia and the European Union, had previously set a price cap for Russian oil, mainly for sea transportation at $60 per barrel. Despite this cap, the International Monetary Fund noted in a recent statement that oil is traded above the agreed limit, and energy exports remain stable. Yet, Russian authorities contend that domestic oil is sold at market prices and in accordance with the Russian president's order not to sell below the cap.
In a bid to strengthen control and ensure compliance, the government now requires insurance and shipping companies to secure a certificate for each loading. This shift in policy could lead to enhanced scrutiny and potential complications along the supply chain.
According to recent enrichment data, the ongoing oil price cap mechanism has faced evolving compliance patterns and market impacts since spring 2025. The reduced global oil prices have kept Russian Urals crude—a significant export grade—below the $60 price cap threshold, enabling the use of Western shipping and insurance services without violating the sanctions. If the cap were strictly enforced, it would have slashed Russian fossil fuel revenues by 8% in just one month alone and 11% in total since EU sanctions were implemented.
An interesting observation is the increased participation of Western tankers in Russian oil transportation. In March 2025, G7-insured and owned vessels transported 20% more Russian oil compared to the previous month. The crude shipments on such vessels have more than doubled since January 2025. Additionally, it's worth noting that China and India have seen a surge in Russian crude imports, marking six-month highs for both countries in March 2025.
Another factor to consider is the influence of currency and price dynamics. The strong ruble has, to some extent, offset the temporary fall in oil prices, providing some relief for Russia's ruble-denominated budget. However, the Urals-Brent discount and revised price forecasts signal ongoing revenue pressure as Brent's projected value for 2025 has been cut by 17%.
To protect its economy, Russia has several countermeasures in place, such as budget adjustments, economic prioritization, and geopolitical adaptation. Despite the risks of higher deficits, Russia continues to fund its war efforts through debt issuance, tax hikes, and potential central bank financing. These measures could potentially lead to long-term inflation or economic crises. Moreover, the ministry of economy predicts that trade reorientation will help offset the impact of U.S. tariffs, maintaining 2.5% GDP growth forecasts.
In summary, the price cap's effectiveness now depends on global oil prices rather than compliance enforcement, with Russia exploiting price discounts and alternative shipping networks to maintain exports. The complex dynamics surrounding the Russian oil market call for continuous monitoring and adaptation as we move forward.
- The new regulation, announced on February 6 by RIA Novosti, requires insurance and shipping firms handling Russian oil to obtain a compliance certificate for each loading, disregarding any contract specifications regarding prices.
- The International Monetary Fund (IMF) has noted that oil is being traded above the agreed price cap set by the G7 countries, Australia, and the European Union, causing energy exports to remain stable despite the cap.
- In an attempt to strengthen compliance, the new policy mandates insurance and shipping companies to secure a certificate for each loading, potentially leading to increased scrutiny and supply chain complications.
- In the Russian business sector, there are indications of increased participation of Western tankers in Russian oil transportation, with G7-insured vessels transporting 20% more Russian oil in March 2025 compared to the previous month.
- To counter economic pressures, Russia has implemented various measures such as budget adjustments, economic prioritization, and geopolitical adaptation, including funding its war efforts through debt issuance, tax hikes, and potential central bank financing.
