Sunday, December 10, 2023

The US has penalized two shipping companies for violating the Russian oil price cap

The US Treasury Department said Thursday that it had fined two shipping companies that brought oil to Russia that violated the multinational’s price limit.

The United States, the European Union countries of the Group of Seven and Australia have imposed a cap of $60 per barrel on oil sales to Russia. The goal of the cap is to deprive the Kremlin of revenue to finance its war in Ukraine, forcing it to sell crude oil at discount prices or divert funds to an expensive alternative shipping network.

The sanctioned companies are based in the United Arab Emirates and Turkey, the department said in a statement.

A UAE-based Lumber Marine vessel is carrying crude priced at $75 per barrel from a Russian port. A vessel from Turkey-based Ice Pearl Navigation is carrying Russian oil at $80 a barrel.

Both companies rely on American service providers. Under the sanctions, the government of President Joe Biden prevents them from conducting business or accessing property or financial interests in the United States.

A Treasury official, who spoke to reporters on condition of anonymity, said the government usually contacts the flag nation and the ship’s insurer when a violation is suspected, causing the ship to lose access. in insurance. or to register the country.

The official said Russia tried to build an alternative network to avoid the cap, but it was expensive, up to $35 per barrel, according to private analysis.

Washington says the cap has achieved its goal, reducing oil tax revenue by 45% last year. The official said that now efforts will be made to increase the cost of the Russian oil industry so that Moscow has less funding for its forces in Ukraine.

World Nation News Desk
World Nation News Desk
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