The United States has intensified its sanctions regime against Russia

Written by Jeppe W

Dec.21 - 2023 7:26 AM CET

Photo: Shutterstock.com
Photo: Shutterstock.com
U.S. ramps up sanctions on Russian oil to thwart 'price ceiling' evasion

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The United States has intensified its sanctions regime against Russian oil revenues, taking significant steps to prevent the circumvention of the established "price ceiling" for maritime transportation of oil from Russia.

This move is part of a broader strategy to exert financial pressure on Moscow in response to its actions in Ukraine.

As reported by European Pravda, the U.S. Department of the Treasury announced that these measures are focused on enforcing compliance with the price ceiling and include updating rules for certain oil transportation service providers.

These updates involve more stringent certification and record-keeping processes, aiming to close any loopholes that might be exploited for evading sanctions.

In a notable action, the Treasury's Office of Foreign Assets Control (OFAC) has imposed sanctions on SUN Ship Management, a shipowner company based in the United Arab Emirates. This company is owned by Sovcomflot, a Russian state fleet operator already under sanctions.

The U.S. also targeted three underground traders of Russian oil, based in Hong Kong and the UAE, who have been facilitating Moscow's efforts to bypass the price ceiling.

In December 2022, Western nations, including the U.S., had agreed to set a cap on the price of seaborne exports of Russian oil at $60 per barrel. The sanctions framework also prohibits Western companies from offering services for transporting Russian oil above this ceiling price.

This measure has significantly impacted Russia's oil trade, compelling it to redirect sales to distant markets like China and India and to invest in creating "shadow fleets" of older, untraceable tankers.

The U.S. Treasury Department has been actively enforcing these measures since October, targeting entities that transport Russian oil above the ceiling price.

This latest round of sanctions represents a continued commitment by the U.S. to use economic levers to respond to Russian aggression and to limit the Kremlin's ability to profit from its oil exports.

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