Indonesian Pertamina Imports Sanctions-Compliant Russian Crude

Pertamina has been importing Russian crude oil complying with the Western sanctions, a top official at Indonesia’s state energy firm said on Wednesday.

“We have opened (to imports from Russia) since last May,” Taufik Aditiyawarman, the chief executive of the Kilang Pertamina International refinery unit, said on the sidelines of a conference of the Indonesian Petroleum Association, as carried by Reuters.

The company imports Russian crude for its domestic refineries and complies with the sanctions imposed on Russian oil exports and trade imposed by the EU and the G7, the official added.

The price cap mechanism set by the G7 and the EU says that Russian crude shipments to third countries can use Western insurance and financing if cargoes are sold at or below the $60-a-barrel ceiling.

The EU has been weighing the possibility to propose a lower price cap.

The EU is already working on the 18th sanctions package against Russia, which could include a lower price cap, sanctions on the Nord Stream 1 and 2 gas pipelines, more shadow fleet tankers designated, and additional sanctions on the Russian financial sector, European Commission President Ursula von der Leyen said last week.

With international benchmarks down to the low $60s per barrel, and at times, lower, the price of Urals, Russia’s flagship crude, has been below the $60 per barrel price cap for weeks. As a result, cap price-compliant shipments can be made from Russia’s ports via tankers, traders, and insurers owned by Western companies.

Ukraine is now urging the G7 to slash the price cap on Russian oil to $30 per barrel, down from the current $60, in a bid to tighten the financial screws on the Kremlin as its war drags into a third year. The EU has already floated a lower cap—$50 is under discussion—but Ukraine clearly wants to cut deeper.

By Tsvetana Paraskova for Oilprice.com

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