Tankers flagged, owned or operated by G7-linked companies lifted 36.2% of Russia's crude exports in July, the highest share in a year and up from 34.4% in June, according to S&P Global Commodities at Sea and Maritime Intelligence Risk Suite data, S&P Global reported. Russia exported 4.3mn barrels a day of crude that month.

The share has now grown for four consecutive months, driven largely by Greek tanker operators, whose liftings rose from 24.9mn barrels in June to 26.4mn barrels in July — the highest monthly volume in nearly three years, keeping Greece in pole position in the Russian crude trade.

The increase in the share of Greek tankers makes a mockery of the EU sanctions regime, gutting what should be the most painful sanction for the Russian budget of its power. The government is struggling to cope with a ballooning budget deficit so any extra oil export revenues is warmly welcomed at the moment.

Instead of increasing, the deficit has been falling in the last months thanks to higher than expected oil prices – a boon that the Kremlin should not be able to tap after tougher oil price cap restriction were kept in place in the most recently 21^st sanctions package.

Russia's federal budget deficit narrowed in July to RUB4.8 trillion, or 2% of GDP, down from RUB5.73 trillion (2.5% of GDP) in June, according to analyst Stefan Demetz, who noted the pattern reflects large expenses being frontloaded into the first months of the year, as usual.

The July improvement follows a first half in which Russia's deficit widened to RUB5.73tn ($70bn) as oil-and-gas revenue continued to lag behind plan, even as the government raised additional funds through other channels, including over $5bn collected from a VAT increase in the first half of the year.

The government's planned budget deficit for 2026 is 1.6% of GDP, meaning July's 2% reading remains above target even as it improved on June. Demetz pushed back on characterisations of Russia's economy as "crumbling," pointing to the narrowing gap as evidence the fiscal picture is more stable than some commentary suggests.

The shift tracks a fall in Urals crude prices, which S&P Global's Platts assessed at a five-month low of $52.927 a barrel free-on-board Primorsk in July, down from $60.297/b in June and as low as $39.72/b on July 2 during an earlier US-Iran truce, before recovering to $61.475/b by August 7 once that truce collapsed. Lower prices widen the pool of Russian crude that can move on G7-compliant tankers, since the US permits shipments below $60/b and the EU, UK and Canada set their threshold at $47.6/b.

Greece, the EU's largest shipowning nation, has become increasingly vocal in questioning the bloc's sanctions rules during negotiations — a stance that helped force the EU to shelve a full ban on shipping Russian oil earlier this month, with Greece and Malta blocking the move.

Athens secured a one-year carve-out for LNG shipping under the EU's 21st sanctions package last month in exchange for agreeing not to block a price-cap increase, while the Union of Greek Shipowners argues the sanctions regime creates unfair competition even as it pledges its members will not transport oil priced outside the cap. The economics explain the reluctance to walk away: Platts assessed time-charter-equivalent earnings for an Aframax tanker running from Ust-Luga to Sikka at $88,069.74 a day on August 6, against a global Aframax benchmark of $73,671.55 a day for non-compliant routes.

Non-G7 shipments, by contrast, remain concentrated in Russia's so-called shadow fleet — which Ukraine's own sea-drone campaign has targeted 205 times since early July — estimated by S&P Global Energy CERA at 2,083 tankers confirmed or suspected to have violated sanctions as of end-June, mostly operated by companies based in mainland China, Hong Kong, Russia and the UAE, whose combined July liftings totalled 73.5mn barrels. That fleet is facing tightening scrutiny: the International Maritime Organization published new flag-registration guidelines in June recommending sanctions cross-checks, after seven countries, including Cameroon and the Cook Islands, reported this year that 115 ships totalling 9.78mn deadweight tonnes had been removed from their registries or had falsely claimed to be flagged with them — 105 of them oil, gas or chemical tankers, and 108 already under Western sanctions designation.