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Good morning. An FT analysis has revealed that inflated shipping costs are enabling Russian companies to earn far more from crude oil sales to India than previously recognised.
Russia has, until recently, appeared to comply on this route with western measures designed to curb its revenues which were introduced after its full-scale invasion of Ukraine last year. Its oil producers have been selling crude to India for below the $60-per-barrel price cap.
But when freight costs are included, they and the traders with whom they work have charged much higher sums.
The FT’s analysis of ships running directly from Russia’s Baltic ports to India suggests that this overcharging, combined with fees earned from shipping the oil on Russia-linked vessels, may have been worth $1.2bn in the three months to July.
Benjamin Hilgenstock, an academic at the Kyiv School of Economics, which has been studying evasion of the price cap, said: “Inflated shipping costs are a major concern as they effectively create a leak in the price cap regime through which someone, somewhere can siphon off billions of dollars.” Read the full story.
Here’s what else I’m keeping tabs on today:
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Economic data: Inflation data is due in India. Economists predict the consumer price index accelerated to 6.4 per cent last month, breaching the central bank’s 2-6 per cent tolerance band for the first time in five months. (Reuters)
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Hong Kong: An appeals court is expected to rule on a challenge filed by seven prominent pro-democracy activists against their conviction and sentencing on charges of organising and taking part in an unauthorised protest nearly four years ago.
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Pakistan: Financial markets will be closed for independence day celebrations.
Five more top stories
1. Pakistan has appointed Anwar ul-Haq Kakar to serve as caretaker prime minister until elections are held in the coming months. The caretaker prime minister would normally hold office until elections are held, 90 days after a parliament’s tenure ends. But Kakar is set for a longer than usual interim rule amid growing expectations that the election will be delayed until next year. Here’s more on Pakistan’s political uncertainty.
2. Deloitte has resigned as the auditor of Indian tycoon Gautam Adani’s logistics unit, in a fresh blow for the billionaire’s business empire. The auditor cited concerns it could not thoroughly scrutinise transactions between companies in the group and the logistics unit, Adani Ports, one of India’s biggest commercial ports operators. The Indian conglomerate says Deloitte’s grounds for resignation are “not convincing”. Read the full story.
3. Saudi Arabia has appointed its first ever ambassador to the Palestinians, amid a flurry of diplomatic activity as the US attempts to broker an agreement to normalise relations between Riyadh and Israel. Here’s more on the potential deal that would reshape the Middle East.
4. Korean conglomerate Posco is leading a push to move production of battery materials from mainland China to South Korea, as companies around the world adapt to qualify for US subsidies — from US president Joe Biden’s Inflation Reduction Act — reshaping the global EV supply chain. Posco’s battery materials chief told the FT that the company is building a supply chain for Ira-compliant materials in which “nothing will be produced or sourced in China.”
5. Republican-controlled areas of the US are dominating a rush of clean technology project investment as President Joe Biden goads opponents for “claiming credit” for the jobs boom despite their efforts to block his landmark climate legislation last year. Read the FT analysis of the surge in green investment, a focus of Biden’s 2024 re-election bid.
News in-depth
With more than 12,000 lawyers and hundreds of law firms including dozens of foreign practices, Hong Kong has long enjoyed a reputation as a global legal hub. But legal practitioners, including corporate lawyers, are concerned the broadening scope of a sweeping national security law could jeopardise the independence of the city’s legal system, as Beijing tightens its grip.
We’re also reading . . .
Graphic of the day
At least 93 people have died in wildfires on the Hawaiian island of Maui, as authorities battle to control what has become the US’s deadliest wildfire outbreak in more than a century. The fires began on Tuesday, engulfing the historical town of Lahaina as it was fanned by strong winds from Hurricane Dora, which passed hundreds of miles south of Hawaii.
Take a break from the news
Russia investigator Christo Grozev of Bellingcat joined Edward Luce to discuss exposing assassinations and Vladimir Putin’s plots, and why warlord Yevgeny Prigozhin “will either be dead or there will be a second coup.” Read the latest Lunch with the FT.
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