Why the G7 Oil Price Cap Failed: Shadow Fleets,War Premium Decay, and Lessons for Sanctions Design

Research Square 2026 Preprint Open access

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Authors: Tugba Ortay Baykal
DOI: 10.21203/rs.3.rs-8881992/v1
Cited by: 0
References: 5

Abstract

Abstract The G7/EU oil price cap on Russian crude, implemented in December 2022 at $60 per barrel, was designed to reduce Russian revenues while maintaining global supply. Using daily price data and 25,399 vessel-level cargo records (January 2020--January 2026), we find the price cap did not function as a binding constraint. The war outbreak is associated with the largest change in the Brent-Urals spread (cumulative abnormal returns of $22.35/bbl, p

Fields of Study & Subjects

Economic Sanctions and International Relations Market Dynamics and Volatility Global Energy Security and Policy

Publication details

Journal / source
Research Square
Publication date
5 March 2026
Language
EN
Document type
Preprint