The U.S.-led coalition imposing a price cap on seaborne Russian oil announced changes on Wednesday to its compliance regime the Treasury Department said will make it harder for Russian exporters to bypass the cap.
The Treasury also imposed fresh sanctions on a ship manager owned by the Russian government and three oil traders involved in Russian oil trade.
The Group of Seven (G7) industrialized countries last year imposed a price cap of $60 per barrel on Russian oil shipments in response to Russia’s invasion of Ukraine.
The coalition will soon require Western maritime service providers to get declarations from their counterparties that the Russian oil was sold under the cap each time they lift or load the oil, the Treasury Department said in a statement.
The price cap mechanism bans Western companies from providing maritime services, including financing, insurance, and shipping for oil sold above the cap.
“These changes will further complicate efforts by Russian exporters to circumvent the price cap while deceiving Coalition service providers, and further raise costs for any Russian exporters that need premier services but are unwilling to sell oil under the cap,” the Treasury Department said.
The Treasury also imposed sanctions on a Russia-owned ship manager and oil traders it accused of being frequent participants in the transportation of Russian-origin oil following the imposition of the price cap, it said in a statement.
Washington targeted a United Arab Emirates-based ship manager that it said is owned by a Russian government-owned fleet operation. It said SUN Ship manages a vessel that the Treasury Department previously targeted for having transported Russian crude oil above the price cap.
The Russian embassy in Washington did not immediately respond to a request for comment.
Also targeted were Hong Kong and UAE-based traders of Russian oil. The Treasury said vessels chartered by Hong Kong-based Bellatrix Energy Limited, one of the traders targeted on Wednesday, have made more than 150 port calls in Russia since the middle of June and said it has traded tens of millions of tons of crude oil and other products of Russia state-owned oil companies.
Since the price cap was imposed last year “little-known oil traders with opaque ownership structures have emerged as frequent participants in the seaborne transport of oil produced by major Russian oil companies, shipping up to half of Russia’s oil exports,” Treasury said in a statement.
The other traders sanctioned were Hong Kong-based Covart Energy Limited and UAE-based Voliton. Since May, vessels chartered by Covart have made at least 23 port calls in Russia while vessels chartered by Volitaon have made at least eight port calls since June, Treasury said.
Bellatrix Energy, Covart Energy, and Voliton have been regular buyers of Russian oil this year, said three traders who follow Russian oil. Covart Energy and Voliton purchased cargoes from Russian oil firms in November and December, according to the traders familiar with the latest loading information and shipping data. Bellatrix had been active during the first half of 2023 but has reduced activity sharply since then, traders said.
The sanctions freeze any U.S. assets of those targeted and generally bar Americans from dealing with them.
Wednesday’s action was the latest in a series of sanctions Washington has announced over the price cap on Russian oil to close loopholes.
Treasury Deputy Secretary Wally Adeyemo said in the statement the designations show Washington’s commitment to support stable energy markets while reducing Russian revenues to fund its war against Ukraine.
The price cap has forced much of Russia’s seaborne exports to alternative buyers in China and India, which the Treasury says adds more costs for Russia to sell the oil, leaving it less revenue to use for waging war. China and India, however, have kept buying oil from sanctioned companies and market players that have ignored the measures.
Source: Hellenic Shipping News
