Maintaining pressure, US sanctions company for violating Russian oil price cap

The US has taken its first enforcement action of the year related to the $60/b price cap for Russian oil, sanctioning a shipping company based in the United Arab Emirates with 18 ships that have repeatedly made calls to Russian ports.

The move shows the US is maintaining the sanctions pressure it began in the last few months of 2023, even as Russian crude prices have hovered near the price cap in recent weeks.

Platts assessed FOB Urals Primorsk at $59.80/b on Jan. 17, according to S&P Global Commodity Insights data. The price has hovered within a few dollars of the cap since early December.

"No one should doubt our coalition's commitment to stopping those who help the Kremlin," Deputy Secretary of the Treasury Wally Adeyemo said in a Jan. 18 statement.

The Treasury's Office of Foreign Assets Control sanctioned the company Hennesea Holdings Limited, which owns 18 ships, Treasury said in the statement.

Sanctions block the foreign entities' assets held in the US and prohibit trade and other financial dealings with those entities.

Shortly before the price cap went into effect, Hennesea bought a batch of older tankers that ship Russian crude oil and petroleum products, the statement said. "Tankers ultimately owned by Hennesea have repeatedly conducted port calls in Russian Federation ports," the statement said.

OFAC had previously blocked one of Hennesea's tankers, the HS Atlantica, for having transported Russian crude above the price cap while using a US-based provider, Matthew Miller, a spokesperson for the State Department, said in a Jan. 18 statement.

"Today's action demonstrates that violating the price cap will result in consequences," Miller said in the statement. "Alongside our Price Cap Coalition partners across the G7, European Union, and Australia, we are steadfast in our commitment to hindering evasion that helps Russia fund its illegal war against Ukraine," he said.

In the last few months of 2023, the US ramped up enforcement of the price cap and imposed multiple rounds of sanctions on entities and ships that carried Russian crude oil above the price cap.

And on Dec. 20, the G7 announced it was tightening its price cap rules. The G7 said it would require coalition shipping service providers to receive attestations from their counterparties each time they lift or load Russian oil.