Putin tests the cap, again

Putin doubled down on shadow-fleet routing this week. The G7 raised the price-cap enforcement intensity, Russia raised the dark-tanker count, neither side blinked. That is the equilibrium move, not a deviation from it.

Managed Friction is operating exactly as the framework predicts. Sanctions are not failing. Sanctions are doing what they always do — generating an adaptation industry that captures the rents the original system tried to extract. Tanker brokers in Dubai, insurance pools in Mumbai, refiners in Gujarat and Shandong, freight forwarders in Singapore. None of this is hidden. Lloyd List has been counting dark tankers in public for two years. The information asymmetry is not about what is happening but what equilibrium is implied. The market mispricing is the assumption that any of it reverts to baseline. Russian oil flows to non-Western buyers continue to rise quarter on quarter as the bargaining lever holds.

Position implied: long mid-size tanker operators with grey-fleet optionality; short trades that price either full enforcement victory or full evasion victory of the cap regime; carry trade is short volatility on the spread between large and small Chinese state-owned banks holding sanctions-adjacent dollar-clearing exposure over the next two years of policy continuation by Treasury and State.