Russian oil price cap “violations” are the reason behind US sanctions against a UAE shipping company.
HYDERABAD , Jan 19 : A shipping business based in the United Arab Emirates (UAE) has been sanctioned by the United States for breaking the $60 per barrel price cap on Russian crude oil shipments.
The Treasury said in a statement on Thursday that Hennesea Shipping Co Ltd., the beneficial owner of eighteen tankers, the most of which were older, that it had been bought in late 2022, had been sanctioned by the Office of Foreign Assets Control (OFAC).
According to a Treasury release, “the US Department of the Treasury’s OFAC is taking its first oil price cap enforcement action of 2024, targeting a shipping company linked to a price cap violation.”
Wally Adeyemo, the deputy secretary of the Treasury, stated, “Today’s measures illustrate once more that anyone who violates the price ceiling would face
“There is no reason to doubt our coalition’s resolve to root out those who support the Kremlin.”
One of Hennesea’s ships, the HS Atlantica, was previously flagged by the Treasury for shipping crude oil with Russian origin that was over the $60 quota.
The goal of the G7’s December 2022 implementation of the price cap on Russian crude oil is to limit the amount of money that Russia has available during the conflict in Ukraine. This will be accomplished by allowing insurance and other services supplied by the West to be used exclusively on shipments that are valued at less than $60 a barrel.
In response to the Russian Federation’s own war of choice against Ukraine, which drove up global energy costs, the Treasury statement stated that the price cap is meant to “maintain a reliable supply of crude oil and petroleum products to the global market while reducing the Russian Federation’s earnings from oil.”
Hennesea’s dollar-based transactions are reportedly going to be blocked by the ruling, which will put the company on the list of Specially Designated Nationals.
“All assets and interests in assets of (Hennesea) within the United States or under the custody or control of US individuals are prohibited and need to be reported to OFAC,” the Treasury said.
In October 2023, two firms and two of its tankers were the targets of Washington’s first price cap prohibition. Since then, fines have been applied to a number of additional organizations and ships for violating the cap.
The campaign of sanctions has also included the European Union.
