US Imposes Sanctions on Emirati Entities over Breach of Russian Oil Price Ceiling
The U.S. has enforced sanctions on three UAE-based entities and a crude tanker registered in Liberia due to their breach of Russian oil price restrictions set by the G7, the European Union, and Australia in retaliation to Russia’s invasion of Ukraine in 2022.
In December 2022, a restriction was put in place, limiting Russian oil imports to less than $60 per barrel, according to al-monitor. The aim was to ensure a consistent supply of crude oil and its derivatives to the global market while also reducing Russia’s oil earnings in response to the increase in global energy prices triggered by the attack on Ukraine.
A statement issued by the US Treasury Department said that the four sanctioned entities “were involved in a price violation scheme in late 2023.”
The UAE entities subject to sanctions are Zeenit Supply and Trading DMCC, Thalassa Shipping DMCC, and Oil Tankers SCF. NS Leader Shipping, the owner of the ship registered in Liberia, has also been designated for sanctions.
According to the Treasury Department, Zenit allegedly sold Russian crude oil in November 2023 at a price exceeding $80 per barrel and transported it using the vessel NS Leader.
The statement also noted that the ship made five port calls in Russia last year, further mentioning that the Russian government is identified as the “ultimate owner” of the NS Leader.
The Treasury Department stated that Zenit and Thalassa collaborated on numerous shipments of crude oil sourced from the Russian Federation and utilized loaded vessels in Russian ports throughout 2023. Additionally, the two entities are reported to have a common business manager and were established within approximately the same week in July 2022.
According to the Treasury Department, SCF tankers have been in control of the NS Leader since September 2023. This includes a November 2023 trip where NS Leader loaded Russian-origin crude oil beyond the established maximum limit.
The Treasury noted that EU, UK, and US approved SUN Ship Management D Ltd managed NS Leader from April 2022 until September 2023.
Oil Tankers SCF operates Russian government-owned oil tankers through Sovcomflot, a Russian state-owned shipping company banned by the West, the statement said.
Oil Tankers SCF also operates US-sanctioned vessels Ligovsky Prospect, Kazan, NS Century, NS Champion and Viktor Bakaev, all of which were involved in exporting crude oil of Russian Federation origin at more than $60 per barrel after the price ceiling. It took effect, the Treasury Department claimed.
This marks the G7’s second enforcement action regarding price caps in 2024, following their recent action against Hennesea Holdings Limited, a shipping company based in the UAE, which occurred last month.
The Treasury Department also said it had taken steps to block the import of certain categories of diamonds mined in Russia, a major source of revenue for Moscow that Washington wants to stop in light of the 2022 invasion of Ukraine.
It includes a ban on the import of non-industrial diamonds mined or mined in Russia, even if they have been substantially transformed in a third country. This measure will come into effect as of March for certain categories of diamonds and will be expanded in September to include additional categories.
The Treasury Department is also banning imports of diamond jewelry and ungraded diamonds of Russian origin, effective March.
“Russia’s top energy official acknowledges that the price cap imposed by the coalition and the sanctions we imposed led to increased discounts on Russian oil, reducing the revenues that the Kremlin depends on,” Brian Nelson, the US Treasury Undersecretary for Terrorism and Financial Intelligence, said in a statement. Because of its illegal war.”
He added that the sanctions serve as a “continuous warning” that the United States will respond to price cap violations.
