U.S Treasury Dept. Sanctions Three UAE Firms For Violating Russian Oil Cap

The US sanctioned three shipping businesses and their operating ships to reduce Moscow’s income amid the Ukraine crisis. The violations stem from a purported $60 per barrel price restriction on Russian oil.

The U.S. Treasury Department imposed sanctions on three firms based in the UAE (Progress Shipping, Kazan Shipping, and Gallion Navigation) and their vessels (Kazan, Ligovsky Prospect, and NS Century).

These businesses are charged with shipping Russian oil beyond the set price cap using vessels that use American services.

The sanctions prohibit transactions between U.S. entities, the sanctioned ships, and their owners. The action is a component of continuing initiatives to uphold the December 2022 oil price cap effective date.

The G7 and Australia imposed the restriction, preventing Western businesses from endorsing Russian maritime oil exports valued at more than $60 per barrel. The aim is to reduce Russia’s oil income without sending oil prices skyrocketing worldwide.

Russia’s oil and gas tax collection increased in October compared to September despite the cap, raising questions about how well-enforced it would be.

Due to alleged price ceiling violations, the U.S. Treasury imposed sanctions on oil ships and their owners for the first time last month.

The latest penalties are aimed at UAE-based businesses that conducted business with US service providers. The deputy secretary of the Treasury, Wally Adeyemo, underlined America’s resolve to take anyone responsible for circumventing the price restriction accountable.

The sanctions freeze the targeted entities’ U.S. assets, forbidding Americans from doing business with them.

The United States seeks to preserve market stability while reducing the profits that the Russian government uses to finance its activities in Ukraine.

Worldwide solid oil prices and Russia’s use of an old fleet of tankers to get around sanctions have made the cap challenging to implement.

Russia has rejected the actions, citing their illegality and self-interest. In the upcoming weeks and months, the U.S. has made it clear that it intends to escalate the costs for Russia and make it more difficult for it to maintain the conflict in Ukraine.

References- WSJ, Reuters

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Source: Maritime Shipping News