the president gustavo pay to has links the heat and rating walls fires to climate change and there's only a slight chance of rain in the next few days. i'm terry martin. thanks for watching the cost for on the sponsored 0. so it's one of the sale when he knows how to use it and pretend this guy knows about energy in a way that these as much structures have no idea what doesn't look behind because it started this energy time. tell us gas from russia to musical wetland dots february 3rd on dw, you cran says it's in danger of losing the war. and russia is more confident of victory than ever. and here's one of the biggest reasons. oil russians most important and most enduring weapon. the country wrecked in at least

$280000000000.00 us dollars for more than 2022. and that's why western leaders made a demand target of their sanctions against moscow. the oil price cost is the west most important sanction. it was designed to keep russian oil flow into the global market, was also limiting the amount of money the kremlin could make from us. for a while has worked not anymore when the price comp was introduced to hit a share impact on the price of russian golf for its oil. for almost 6 months now, russian oil has been sold on global markets well above the price cap of $60.00 us dollars. 3 and which g 7 states cut off access to their services for the 1st time, hoping to get 3 if we can really suffer from full price kept. now see, hey, turns out the circumstances in this episode, we look at how russia rejuvenated. it's all in revenues, and we will consider what options ukraine on its allies have to hit by. there's

a kind of a sense of which you see and make some adjustments to the same. you now to make sure that the pressure on rushes things as the war drags on questions are being asked of how long both sides can fall into the 5 threat. david's overhead along western support for ukraine will last, and russia is ramping of ministry spending. the huge increase in budgets pending for more next year. they're talking about going from 4 percent of 50 feet to 6 percent to the basis of law. this is a law how long i should be staying this war. unfortunately for an extended period. welcome to business beyond. let's go back a little bit. after the full scale russian invasion of ukraine and february 2022. the us that you and the other western powers introduced a range of sanctions, which mostly targeted russia's financial system. hundreds of billions of dollars worth of russian central bank reserves held abroad were frozen,

while the country was also excluded from the swift international payments system. these sanctions are designed to take a heavy toll on the criminal interests and their ability to finance war. the russian economy, whether those better than many experts expected to but this still had an effect. so imagine the world without assumptions. so these are nodes things we can have access to western military technology or deals that are best acknowledged. who didn't came through with the over 2 months. so if you think about this world, i guess the outcome of the war on the better see what the new brain would have been very different. it's able to, to the you was slow to target russian gas and oil early on. mostly because its own economy was still reliant on the part of the reason the kremlin made so much money in 2022 late last year. the you finally took action on russian oil along

with countries from the g 7 and australia. that was with the introduction of something which we've mentioned already. and which you're going to hear a lot more about in this episode. the price comp, the, if you decided that it was going to implement it's embargo on russian wasn't going in part of that it embargoed was also. ready prohibition for your repeated service providers. i to participate in the state, but actually oil. and this would be, for instance, shipping companies and maritime insurance companies for energy prices source throughout 2022. and there were concerns that an embargo could push them up again, which would defeat the purpose of the sanction. out of this concern, the result is uh, the concept of the price cap, which is a really a very complex intervention into the market. and the basic idea is that this

provision of the embargo that would have prohibited europe and companies from participating was. ready rolled back as long as uh the oil was. busy under a ser e racial which was later set at $60.00 per barrel. the oil price comp aims to keep russian oil on the global market, but also aims to limit the price that can be sold for the companies from the u. r. g 7. countries can provide services such as insurance for the transit of russian oil, but only if it is shown that the oil was traded for no more than 60 us dollars per barrel. well below average global oil prices. it wasn't unusual and somewhat daring intervention for the 1st few months. it worked like a charm. the cap had an immediate impact on revenues. in the 1st 6 months of 2023 brochure took in 47 percent less in oil revenues than it did in the 1st 6

months of 20. $22.00 and a half for the loan revenues were 67 percent down year on year. broadly speaking, the energy sanctions regime had the desired impact. we know that the rest of the oil remain on the market. prices did not rise until at least at the old us production cuts later in the year. and brushing export earnings. l sharp would be we think by about 30 percent a year to date and budget revenues from. ready oil decline bias, something between 35 and 40 percent. but even before the cap was introduced, russia was working on ways to get around as one of the main ways is through its so called shadow fleece. russia is a bit. ready need to ship. ready oil from on vessels that are essentially sanctions bruce. so this is what is often talked about as the shadow leads to the question, what exactly constitutes a shadow of lead to that? so, but essentially means,

russia's ability to use ships that are not boons by an s t and the g 7, or e u. and that is not insured by n, as in these jurisdictions. and then the price capt doesn't look like russia has a mazda fleece of hundreds of awesome aging tankers to move its all around the world without being subject to the con. the typically have complex ownership structures. many operate without a proper insurance. on the use of various methods to avoid detection, including creating fake locations, signals being able to sell or without abiding by the cap means russia is now getting close to average global prices per barrel rushes capacity to keep going doesn't mean that the western alliance doesn't have options, there's little doubt if that's something needs to be done and on fast. so if you ask the percentage points of view to be more than does it, i mean, is she will spend with the little even more price goes on. because for example,

eventually the least, i shall be happy to go father. and that's the best his uh, preference is so i think it typed in in the, um, uh, basically the assumptions to reduce the amount of money if we can, can spend on the world is what needs to be done. there are things that need to be done to make sure no pressure on russia is maintain. otherwise, the country will already significantly more permits all the exports going forward. and it's also a problem with the credibility of the broader sanctions. first, the hoping commission has already agreed a new round of sanctions against russia, although the exact details have not been released. the commission confirmed the following to dw in a statement. president funder lions said recently the new package would include new import and export bands, actions to type in the oil price cap, turf managers, and 3rd country companies which circumvent the sanctions. it's now up to the $27.00

e. u. member states to agree unanimously to the proposals, but there's no clear timeline on when that may happen. to have been reports that the proposals include plans for denmark to be given the task of inspecting and potentially blocking tankers carrying russian or through the narrow danny straits. more than half of all russian seaborne or like sports cross the straits. it's believe the danish authorities with target ships operating with the western insurance based on laws to do with environmental risk, with russia and having to go on the same kind of western insurance. the other schemes we believes that these insurance companies are actually not a national equipment to pay out in the case of and he could logical disaster. it's a genuine risk given how well and some of the tankers, russia, is using our but introducing this sanction code called russia's revenues typically

required, for instance. busy optics, the coastal states if. ready require certain insurance standards, and it would also force russia to rely again on western maritime insurance companies. and this would mean that the migration price caps system remains place for longer. then there's the question of enforcement. we mentioned at the station from earlier. that's where paper work is falsified. just suggest ships are complying with sanctions. it's another area which needs to be tightened significantly. approaches revenues are, can be restricted. last month, the us section 3 and you a best shipping companies for exporting russian oil above the price comp. benjamin higgins stock says the problem is ramping current ways of dealing with this are nowhere near enough? it's very difficult for a forcing authorities to investigate and to determine if a violation actually took place here. and what we're thinking about here is original sales contracts,

bank transactions related to customs declarations that allow enforcing agencies to determine at. ready price, actually this cargo was sold right now. you only have this advert station, which is essentially a one page document uh on which someone, uh says, this was sold at price capital or below, uh, and then something from that is entirely in that or so there's russia itself and the various companies providing dodgy services to help evade the price comp. but what about sanctioning the likes of china or india who buy so much of the oil? we should remember that uh nobody wants to be sanctioned by the us for your business, very costly for anybody for wants to work in the mobile mark. and so i think so the risk of coalition should the more of that, and remember my skip was design has such a way that it's good for the buyer. so train these buyers and siri, it isn't in

b as interest to pay less for rush results. that could potentially tell russia the fear of sanctions means they won't pay above the cap. but there are clear reasons why sanctions against india or china our own like you will, doesn't want to sanction china because you don't wants to play this role the call. because to us you have a bunch of some consensus to be a best. so these are the train us doesn't run through such an engine because it is an important counter wait in the sand though they've been us a chance. so we don't see union channels within less than a coalition to go this in the, near the 2 years since prudence troops, port across ukraine's borders, the russian economy has been hit with a way of unprecedented sanctions. a times it's ministry campaign of slandered it's been written off,

but it's still going. a huge increase in the defense budget suggests putting still as serious means at his disposal, which put him in charge with this open lady price, i presume in charge. i think they will manage as little as economy is not in the ruins, which is not the case is in the forecast for the 22 percent or 5 percent. there is no going to break the political that we should dispense with the notion that sanctions alone in in this. ready war because they mean that russia no longer financed it's more expenditures. i always think that's realistic. ultimately, we're also talking about a dictatorship. and if you, if you prioritize prioritize conducting this war over everything else, then you can shift expenditures given the limited battlefield progress for you, created recently on diet silver, continued western sup. busy pressures on to show that the sanctions state of matter

. i don't think any of these uh, developments or measures taken by themself. determine rushes ability. that is more, it just makes it increasingly more painful. and that's why we said to keep working on making sure that the that the energy sanctions for seam remains effective. those who know russia and to best say that no amount of financial hardship will make him stop. the work is not going as they planned. but i mean, they are no dogs in their mind that they need to read to you this war, and she will continue the war until his last breath. a sobering sauce for those willing ukraine to succeed, but also a call to action, to keep targeting polluters and rushes most powerful weapons the,

the ukraine approaches. the 2nd that of us ray of russia is full scale invasion with some alarming on substances. will the us be able to restock the items? and i munition supplies which drive out 4 months ago, have the big promises from the west about staying with ukraine as long as it takes time to dust. my guess this week is alexi gunter and co ukrainian. m, p angelica to the parliamentary assembly of the council of your one thing shouldn't be clear for everybody. ukrainian people are fighting about who we are losing people every day. and we come to wait forever. and we can fight.