TY - UNPB
T1 - The Dynamics of Evasion
T2 - The Price Cap on Russian Oil Exports and the Amassing of the Shadow Fleet
AU - Cardoso, Diego S.
AU - Salant, Stephen W.
AU - Daubanes, Julien Xavier
PY - 2025
Y1 - 2025
N2 - To reduce funds for Russia’s Ukraine invasion, Western governments imposed a price ceiling on Russian seaborne oil exports using Western services. To sell above that ceiling, Russia developed a “shadow fleet” which uses no such services. We use a calibrated model driven by this fleet’s expansion to assess various sanctions. While all sanctions reduce the present value of Russia’s profits, we find that the tighter the ceiling and the tighter the enforcement, the less harm sanctions impose, contradicting conventional wisdom based on Hotelling lemma. However, policies to reduce the shadow fleet’s size may increase the sanction’s effectiveness.
AB - To reduce funds for Russia’s Ukraine invasion, Western governments imposed a price ceiling on Russian seaborne oil exports using Western services. To sell above that ceiling, Russia developed a “shadow fleet” which uses no such services. We use a calibrated model driven by this fleet’s expansion to assess various sanctions. While all sanctions reduce the present value of Russia’s profits, we find that the tighter the ceiling and the tighter the enforcement, the less harm sanctions impose, contradicting conventional wisdom based on Hotelling lemma. However, policies to reduce the shadow fleet’s size may increase the sanction’s effectiveness.
M3 - Working paper
T3 - CESifo Working Paper
BT - The Dynamics of Evasion
ER -