U.S. Sanctions Entities for Breaching Russian Oil Price Cap
In a decisive move that reverberates across the global oil market, the U.S. Treasury Department has imposed sanctions on three entities based in the United Arab Emirates (UAE) and one Liberia-registered oil tanker for violating the price cap on Russian oil. This coalition-led measure, aimed at curtailing Russia’s war funding while maintaining oil market stability, has seen its first enforcement action since its inception in December 2022.
The Sanctioned Entities and Their Implications
The entities sanctioned by the U.S. Treasury Department include Zeenit Supply and Trading DMCC, Talassa Shipping DMCC, and Oil Tankers SCF Mgmt FZCO, all based in the UAE. The oil tanker NS Leader, registered in Liberia, was also targeted in this action. These entities stand accused of defying the price cap on Russian oil, which was set at $60 per barrel by the Group of Seven (G7) countries, the European Union, and Australia.
The sanctions result in the freezing of any U.S. assets belonging to these entities and prohibit Americans from conducting business with them. This move underscores the commitment of Western nations to enforce the price cap and disrupt Russia’s ability to fund its military operations in Ukraine through oil revenues.
The Price Cap and Its Purpose
The price cap, introduced in December 2022, aims to limit Russia’s income from oil exports without causing significant disruptions to the global oil market. It restricts the use of Western services, including insurance and transportation, for shipments of Russian oil priced above the cap.
This strategic approach is designed to maintain a steady oil supply, keep prices manageable for consumers, and deny Russia the financial resources to continue its war in Ukraine. The sanctions on the entities and the oil tanker serve as a stark reminder of the consequences for those who defy this international agreement.
Expanding Sanctions: Diamonds Join the List
In addition to the oil-related sanctions, the U.S. has taken further steps to restrict the import of certain Russian-mined diamonds. Beginning March 1, the import of Russian-origin non-industrial diamonds of 1 carat or more, diamond jewelry, and unsorted diamonds is barred. From September 1, the import of non-industrial diamonds mined in Russia weighing 0.5 carats or more will also be prohibited.
These measures are part of the ongoing efforts to diminish Moscow’s financial resources for its military operations. They represent a phased implementation of the G7 commitments to impose restrictions on the importation of diamonds mined or extracted in Russia.
A Clear Message to the World
The U.S. Treasury Department’s actions send a clear message to the global community: violations of the oil price cap and other international sanctions will not be tolerated. As the world grapples with the far-reaching implications of Russia’s war in Ukraine, these sanctions underscore the collective determination to hold Russia accountable and protect the integrity of the global oil market.
Read More: U.S. Sanctions Entities for Breaching Russian Oil Price Cap and Expands Diamond