US Sanctions Tanker Firms for Russian Price Cap Breach

The US is stepping up its efforts to control Russia's energy exports. File Image / Pixabay

The US has sanctioned two tanker companies for breaching the price cap imposed on Russian crude exports, in its first significant action to defend that policy.

The US Treasury Department's Office of Foreign Assets Control (OFAC) has imposed sanctions on two companies for carrying Russian crude cargoes priced above the cap, as well as identifying the vessels themselves as blocked property, it said in a statement on its website on Thursday.

The G7 countries, the European Union and Australia imposed a price cap of $60/bl on Russian crude exports in December 2022, banning companies from providing services like insurance to tankers carrying Russian cargoes traded at higher price levels. A similar scheme was introduced for refined products exports in February.

Lumber Marine SA's tanker the SCF Primorye carried Novy Port crude oil priced above $75/bl after the cap entered effect, and Ice Pearl Navigation Corp's tanker the YasaGolden Bosphorus carried ESPO crude priced above $80/bl, OFAC said in the statement.

"Lumber Marine SA and Ice Pearl Navigation Corp were both designated pursuant to Executive Order 14024 for operating or having operated in the marine sector of the Russian Federation economy," OFAC said.

"OFAC also identified the SCF Primorye and the Yasa Golden Bosphorus as property in which Lumber Marine SA and Ice Pearl Navigation Corp, respectively, have an interest.

"As a result of today's action, all property and interests in property of the persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC."

Further actions along the same lines can be expected, Deputy Secretary of the Treasury Wally Adeyemo said in the statement.

"Today's action demonstrates our continued commitment to reduce Russia's resources for its war against Ukraine and to enforce the price cap," Adeyemo said.

"We remain committed to implementing a price cap policy that has two goals: reducing the oil profits upon which Russia relies to wage its unjust war against Ukraine and keeping global energy markets stable and well-supplied despite turbulence caused by Russia's unprovoked invasion of Ukraine. We will continue to take actions to achieve these two goals."