The U.S. Treasury Department on January 18 issued new Russian-related sanctions targeting a United Arab Emirates shipping company and 18 vessels that the department said have shipped Russian seaborne oil priced above the $60-per-barrel cap set by a U.S.-led international coalition.
The Treasury Department said in a news release that its Office of Foreign Assets Control (OFAC) designated the U.A.E.-based Hennesea Shipping Company, which it said was the "ultimate owner" of the 18 tankers.
OFAC previously identified one of the vessels, the HS Atlantica, as having transported Russian-origin crude oil priced above the $60 cap while using a U.S.-based provider of maritime services.
The Group of Seven (G7) industrialized countries imposed the price cap on seaborne Russian crude oil in December 2022 in response to Russia's invasion of Ukraine. The price cap aims to reduce the amount of oil revenues Russia can generate for use in the war while maintaining a stable global market.
The price cap works by prohibiting shippers, insurance, finance, and other services from handling cargoes of Russian crude unless it is sold at or below the $60 price cap. The world's key shipping and insurance firms are based in G7 countries, giving them leverage to set the price cap and make it difficult for Moscow to sell its oil for a higher price.
The Treasury Department said shortly before the price cap went into effect, Hennesea acquired older tankers that ship Russian crude oil and petroleum products. It added that tankers "ultimately owned" by Hennesea have repeatedly conducted port calls at Russian ports.
The sanctions against Hennesea block the company from dollar-based transactions by placing the firm on the Specially Designated Nationals list.
"Today’s actions once again demonstrate that anyone who violates the price cap will face the consequences," said Deputy Treasury Secretary Wally Adeyemo. "No one should doubt our coalition's commitment to stopping those who help the Kremlin."
The Price Cap Coalition, which also includes the European Union and Australia, last month announced changes to its compliance regime that the Treasury Department said would make it harder for Russian exporters to bypass the cap. The coalition said then it would require Western maritime service providers to get "attestations" from other businesses that the Russian oil was sold under the cap each time they lift or load the oil, the Treasury Department said.