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Some of the most popular flag states for oil tankers – Panama, the Marshall Islands, and Liberia – have come under increased pressure from the West to boost the monitoring of vessels flying their flags to make sure they are not violating the $60 a barrel price cap on Russian crude oil, Reuters reports, quoting a source who has seen the communication to the flag states.
The U.S. has been leading the efforts of the G7 and the EU to impose sanctions and embargoes on Russian crude oil and fuel exports. The price cap of $60 per barrel of Russian crude oil says that Russian crude shipments to third countries can use Western insurance and financing if cargoes are sold at or below the $60-a-barrel ceiling. The measure took effect at the end of 2022 when the EU imposed an embargo on imports of Russian crude oil.
Meanwhile, Russia has amassed a “shadow fleet” of tankers, which helps it ship its oil to international markets, mostly to Asia.
The West is considering toughening up the sanction enforcement on evaders of the price cap on Russian oil, almost none of which now trades below the ceiling of $60 per barrel.
In October, the United States took a tougher stance on the sanctions against Russia and sanctioned two vessels for violating the price cap. A month later, the U.S. imposed sanctions on three maritime companies based in the UAE and three vessels owned by the companies for shipping Russian oil sold above the price cap.
On Friday, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) added three additional companies and vessels to the sanctioned list for violations pertaining to the oil price cap set on Russian crude oil.
Of the three entities sanctioned on Friday, two companies are based in the United Arab Emirates: Sterling Shipping Incorporated and Steymoy Shipping Limited. The third entity to find itself on the list is HS Atlantica Limited, based in Liberia.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com