The United States Expands Sanctions on Russian Oil Exports

On Thursday, January 18, the U.S. Treasury Department sanctioned a shipping company based in the UAE for violating the $60 per barrel price cap on Russian crude oil exports. The Office of Foreign Assets Control (OFAC) announced that it has added the shipping company 'Hensi', which owns interests in 18 mostly old oil tankers, to the sanctions list. U.S. Treasury Deputy Secretary Wally Adeyemo stated, 'Today's action once again shows that anyone who violates the price cap will face consequences. No one should doubt the coalition's commitment that we will not allow assistance to the Kremlin.' According to the department, one of the ships, named 'HS Atlantica', was identified as using a U.S.-based marine service provider to transport crude oil of Russian origin at prices above the $60 cap. The U.S. is part of an international coalition of countries, including G7 members, the European Union, and Australia, that have agreed to ban imports of crude oil and petroleum products from the Russian Federation. These countries have also agreed to limit a wide range of services related to the maritime transportation of crude oil and petroleum products from the Russian Federation unless Russian oil is bought and sold at or below the price cap set by this coalition or at a price for which a license has been issued. This policy, aimed at reducing Russia's financial capacity to continue its aggression against Ukraine, is known as the 'price cap'. The price cap set in December 2022 was $60 per barrel for Russian crude oil. OFAC also imposed sanctions on three shipping companies on November 16 that were selling Russian crude oil above the agreed price cap. At that time, OFAC emphasized the commitment of the Treasury Department and its international partners to responsibly reduce Russian oil revenues that 'could be used to finance its ruthless aggression against Ukraine.' Adeyemo stated that with this action, 'we are reducing the profits that the Kremlin uses to finance its illegal war and we will not relent in pursuing those who facilitate evasion of the established price cap.' Regarding the consequences of the new sanctions, the U.S. Treasury Department stated that all assets and interests in the property of individuals who used their services in the U.S. for exporting Russian oil above the price cap must be blocked and reported to OFAC. Additionally, any entity that directly or indirectly owns 50 percent or more of the assets or interests in the property of these individuals will also be blocked. Furthermore, 'all transactions by these individuals in the U.S. (or in transit) from the U.S. are prohibited unless a specific license for it or an exemption from it has been issued by OFAC. The UK Maritime Security Organization: Houthis mistakenly targeted a tanker carrying Russian oil. Reuters: Iran's oil exports to China have stopped. The U.S. will sanction financial institutions supporting 'Russia's war machine'; Moscow: 'We will cut ties.'