US imposes sanctions for violations of Russia oil price cap

The Treasury also said it had taken steps to bar the import of certain categories of diamonds mined in Russia

Published : 9 Feb 2024, 05:56 AM
Updated : 9 Feb 2024, 05:56 AM

The US Treasury Department said on Thursday it had put sanctions on three entities based in the United Arab Emirates (UAE) and one tanker registered by Liberia for violating a cap placed on the price of Russian oil by a coalition of Western nations.

The Treasury also said it had taken steps to bar the import of certain categories of diamonds mined in Russia, another step designed to deprive Moscow of revenues following the 2022 invasion of Ukraine.

In a statement, the Treasury Department said it had imposed sanctions on three UAE-based entities - Zeenit Supply and Trading DMCC, Talassa Shipping DMCC and Oil Tankers SCF Mgmt FZCO - as well as on Liberia-registered oil tanker NS Leader.

The sanctions freeze any US assets of those targeted and generally bars Americans from dealing with them.

"Today’s action against vessels violating the price cap on Russian oil should serve as a continued warning that we can and will enforce violations of the cap," said Brian Nelson, a Treasury under secretary for terrorism and financial intelligence.

The price cap imposed in December 2022 by the Group of Seven countries, the European Union and Australia bans the use of Western maritime services such as insurance, flagging and transportation when tankers carry Russian oil priced at or above $60 a barrel.

The cap is part of Western sanctions that aim to reduce Russia's ability to fund its war in Ukraine while keeping oil markets well supplied. Russia has had to invest in a ghost fleet of aging tankers and send oil to consumers like India and China, much further than traditional customers in Europe. Treasury officials say those expenses reduce Moscow's revenues that it can use for war.

Since last October the United States has placed sanctions on about 27 tankers for carrying Russian oil above $60 while using a Western maritime service.

The determinations, which implement G7 commitments made in December, bar the import of Russian-origin non-industrial diamonds of 1 carat or more, diamond jewelry and unsorted diamonds starting March 1 and the import of non-industrial diamonds mined or extracted in Russia weighing 0.5 carats or more starting Sept 1.