Published by The Maritime Executive

Published by The Maritime Executive

Published by The Maritime Executive

Published by The Maritime Executive

Published Sep 2, 2022 4:07 PM by The Maritime Executive

The G7 nations have reached a landmark decision to attempt to put a price cap on seagoing shipments of Russian oil, hoping to restrict the amount of money flowing to Moscow without an outright ban on its crude. While an outright embargo could be effective in reducing Russia's oil income, it would also have substantial impact on the rest of the global economy, and the price cap is intended as a compromise solution. 

In a joint statement, the G7 finance ministers proposed "a comprehensive prohibition of services which enable maritime transportation of Russian-origin crude oil and petroleum products globally" except for oil purchased below a certain price, which would be determined by the implementing nations. The idea is a form of a "buyer's OPEC": unless the oil is sold below an artificial price threshold, it can't be bought.

The G7 solicited input and help from other countries involved in trading in Russian oil in order to maximize the effectiveness of the measure. In particular, it noted that artificially cheap Russian oil could benefit low- and middle-income countries, which have already been hit by inflation and high food costs driven by the Russian invasion. 

The mechanism would work by restricting "service providers" - shipowners, charterers, insurers, bankers, etc. - to doing business related to Russian seaborne oil only if the oil sale price fits the limit. 

However, getting from enactment to implementation may not be easy. First, shipping companies may not be equipped to assess the true sale price of the oil; it would be simple for the buyer and seller to misrepresent the price, just by making one low payment for reporting purposes and then arranging additional covert payments through shell companies. Law enforcement agencies might have the sophistication to detect this kind of fraud, but a shipowner might not have the resources to do much more than accept the declared price at face value - unless provided with some form of vetting assistance. 

The other obstacle could be Russian pushback, which might come in unexpected ways. Russia could decide to stop selling oil to countries participating in the ban in an attempt to break the unity of the coalition. The Kremlin could also apply pressure in other ways, as it appeared to do Friday: just after the price cap plan was revealed, Russian state gas company Gazprom announced that it had discovered leaks in a pipeline compressor station for the Nord Stream 1 pipeline. The repairs, Gazprom said, would mean that it would not be able to reopen Nord Stream 1 (which supplies a substantial share of Germany's gas) as scheduled. It gave no timeline for reopening.

Published Sep 2, 2022 5:57 PM by The Maritime Executive

Almost 37 years to the day from when a team from Woods Hole Oceanographic Institution first located and photographed the wreck of the Titanic, a new expedition has returned with the most detailed images captured of the vessel. Seattle-based OceanGate Expeditions released the amazing 8K video footage showing never before seen details of the ship that famously sunk on its maiden voyage in April 1912.  Exploring the wreck that is sitting on the floor of the ocean 380 nautical miles...

Published Sep 2, 2022 5:14 PM by The Maritime Executive

The ongoing dispute between the union representing dockworkers and the UK’s major ports will shift to Liverpool with Unite the Union scheduling a strike at the port for the last two weeks of September. While only about a fourth of the size of Felixstowe, the strike is still expected to place further strains on the supply chain and may also be a harbinger of additional disruptions targeting Felixstowe in the coming weeks. The contract dispute mostly centers on the union’s...

Published Sep 2, 2022 4:13 PM by The Maritime Executive

Gibraltar continues to report making progress in its attempts to remove the oils aboard the bulker that hit another vessel at the beginning of the week. Teams are also working to contain the damage from the leaks and a formal investigation was launched. The condition of the 35,263 dwt bulker OS 35 remains largely unchanged with the salvage teams not immediately fearing that the vessel will break in two after developing cracks in the area of the number two hold....

Published Sep 2, 2022 2:42 PM by The Maritime Executive

After blaming a backlog of containers at the port for contributing to the congestion and delays, the Port Authority of New York and New Jersey has delayed the implementation of an “imbalance fee” that it planned to start charging carriers as of September first. The port remains committed to the concept but reports that it will revise the approach before implementing the fee in the fourth quarter of 2022. Announcing the plans for the fee at the beginning of...

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