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U.S. Sanctions U.A.E. Maritime Firms for Bypassing Russian Oil Price Cap

The U.S. Treasury Department has imposed sanctions on three maritime companies based in the United Arab Emirates (U.A.E.) and three vessels owned by the companies for shipping Russian oil sold above a price cap imposed by the world's major economies to reduce the amount of oil revenue Moscow has to fund its war in Ukraine.

The companies and the vessels are accused of engaging in the export of Russian crude oil priced above the $60 a barrel cap. The department's Office of Foreign Assets Control (OFAC) said in announcing the sanctions on November 16 that the vessels used "U.S.-person services while transporting the Russian-origin crude oil."

The price cap bans Western companies from providing such services, including insurance, finance, and shipping, for Russian seaborne oil exports sold above $60 a barrel.

The Group of Seven (G7) leading industrialized countries -- Britain, Canada, France, Germany, Italy, Japan, and the United States -- imposed the price cap last year after ruling out an outright ban on Russian seaborne oil in order to keep the commodtity flowing. Australia later joined the G7 in enforcing the price cap.

"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," Deputy Treasury Secretary Wally Adeyemo said in the Treasury Department's statement.

The United States is committed to maintaining market stability in spite of Russia's war against Ukraine while at the same time "cutting into the profits the Kremlin is using to fund its illegal war," Adeyemo added.

State Department spokesman Matthew Miller said the price cap continues to limit the impact of Russia's war against Ukraine on global energy markets.

"Since our Coalition implemented the price cap policy, we have been clear in communicating that our aim is to prevent Russia from earning a steep wartime premium on its oil sales while also maintaining global energy market stability," Miller said in a statement.

The action freezes any assets in U.S. jurisdiction owned by those targeted and generally bars Americans from dealing with them.

The U.A.E.-based firms targeted are Kazan Shipping Incorporated, Progress Shipping Company Limited, and Gallion Navigation Incorporated. The vessels are the Kazan, Ligovsky Prospect, and NS Century, the Treasury Department said.

The action comes a month after the Treasury Department imposed the first sanctions on owners of tankers accused of carrying Russian oil priced above the cap. One of the owners is in Turkey, the other is in the U.A.E.


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