U.S. Ramps Up Sanctions on Maritime Companies

The U.S. Treasury Department has imposed fresh sanctions on an array of maritime companies for shipping Russian oil sold above the G7’s price cap. 

The sanctions have been imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), as Washington seeks to close loopholes and punish Moscow for its incursion into Ukraine.

Sanctions have been applied to three United Arab Emirates (UAE) based companies. Three vessels owned by the companies have also been listed.

In a statement, Deputy Secretary of the Treasury, Wally Adeyemo, said: 

“Shipping companies and vessels participating in the Russian oil trade while using Price Cap Coalition service providers should fully understand that we will hold them accountable for compliance. 

We are committed to maintaining market stability in spite of Russia’s war against Ukraine, while cutting into profits the Kremlin is using to fund its illegal war and remaining unyielding in our pursuit of those facilitating evasion of the price cap”.

The sanctions fall under the auspices of the ‘Price Cap Coalition’, an international coalition of countries including the G7, the European Union, and Australia that have agreed to prohibit the import of crude oil and petroleum products of Russian Federation origin. 

The countries of the Price Cap Coalition have also agreed to restrict a broad range of services related to the maritime transport of crude oil and petroleum products of Russian Federation origin - unless the oil has been bought or sold at or below the specific price caps established by the Coalition. 

The first price cap took effect in December 2022 with a cap on Russian crude oil at $60 per barrel. 

As per many commentators, the price cap is an attempt to maintain reliable global supplies of crude oil, whilst also limiting the revenues the Russian Federation earns from oil. 

The recent sanctions enforcement appears against the background of a rise in global oil prices to $85 a barrel, as production cuts and thin world spare production capacity bite into overall supply. Russia’s growing use of a ‘shadow fleet’ of tankers means that, to date, much Russian oil has traded above the price cap. 

Are you trading compliantly? 

Whether you’re trading commodities such as crude oil - or transporting it - it’s more important than ever to ensure you’re doing so compliantly. 

The consequences of breaching sanctions such as those set out by the Price Cap Coalition can be severe.

If you want to ensure you don’t fall foul of the many sanctions that have arisen since the Russia Ukraine war, speak to Shearwater Law’s sanctions specialists today. 

Speak to Shearwater Law about sanctions support