The G7 price cap and the attestation system

An unusual design

Most sanctions prohibit something. The oil price cap permits something, conditionally.

The coalition that adopted it — the G7 states, the European Union and Australia — did not want Russian crude off the market, because removing several million barrels a day would have raised the price of oil worldwide and transferred the gain to the exporter it was trying to squeeze. It wanted the oil to keep flowing at a lower price to Russia.

The mechanism it chose works through services rather than cargo. Shipping, insurance, brokering, flagging and related services provided by coalition-linked firms may be used for Russian crude and petroleum products only where the cargo was bought at or below a set price. Above that price, those services are prohibited.

How attestation works

Nobody in the chain can verify a price they never see. An insurer in London does not know what a refinery in Asia paid a trader in Dubai. The coalition’s answer was a tiered model of attestations.

Parties with direct access to price information attest to it. Parties further from the trade rely on those attestations, and are expected to hold records and to do due diligence proportionate to their position. Coalition guidance sets out what that means in practice, and it has been tightened over time: per-voyage attestations rather than blanket ones, and itemised ancillary cost information available on request, so that inflated freight and insurance charges cannot be used to disguise a price above the cap.

The result is a compliance regime built on paper flowing in the opposite direction to the oil.

Where it leaks

Three weaknesses are visible in the coalition’s own advisories.

Attestations can be false. They are statements, not verified facts. The tightening toward per-voyage attestations and cost itemisation is a response to exactly this.

Costs can be inflated. If freight is billed far above market, the effective price of the oil can exceed the cap while the invoice for the cargo appears compliant. This is why guidance asks for itemised ancillary costs.

The trade can leave the system entirely. This is the important one. A cargo sold above the cap simply avoids coalition services: a ship owned through companies outside the coalition, insured by an unfamiliar insurer, classed by a society outside the international association, brokered outside London. Nothing in the cap prohibits that trade — it prohibits coalition firms from touching it.

The cap as the engine of the shadow fleet

That last point is the connection between an oil-price policy and a fleet of ageing tankers.

Before 2022 an owner had little reason to leave the mainstream system: the insurance was better, the finance was cheaper, the charterers were solvent. The cap changed the arithmetic for a specific trade. Carrying Russian crude above the cap became profitable precisely because it required leaving.

What followed was a scramble for tonnage. Old tankers that would otherwise have gone for scrap were bought at prices well above scrap value. Ownership moved into single-ship companies in jurisdictions that publish little. Insurance moved to providers whose capacity to pay a large pollution claim has never been tested. Flags moved to small registries willing to take the business.

Each of those steps is visible in the sanctions data on this site: the age distribution on the statistics page, the concentration of owners in a handful of jurisdictions, the flag changes recorded on individual vessel pages.

How enforcement reaches a ship

The cap itself does not list vessels. Designations do, and they use other instruments: OFAC blocking sanctions, UK ship specifications, EU Annex XLII entries. A vessel found to have carried above-cap oil while using coalition services is a candidate for designation under those regimes, and the reasons published by the UK and the EU often say so in terms — “carrying oil or oil related products that originated in Russia” appears repeatedly in UK statements of reasons.

So the cap and the vessel lists are two layers of the same policy. The cap sets the condition; the listings punish specific hulls that the authorities conclude have been operating outside it, or that have practised the evasion techniques the OFAC advisory describes.

What to check on a specific vessel

A vessel page here will not tell you whether a cargo breached the cap; no public dataset can. What it can tell you is whether an authority has concluded something about the hull, when, and in whose words. For the trade context around a listing, the UK statement of reasons is usually the most explicit of the three regimes, and it appears verbatim in the listings table on each vessel page.