US warns against Russian oil price cap evasion — RT Business News

Washington’s sanctions watchdog claims some crude exports from Russia may be trading above $60 a barrel

The US Treasury Department issued an alert note on Monday warning US companies about possible circumvention of the price cap on Russian oil being exported through the Eastern Siberia Pacific Ocean (ESPO) pipeline and ports in Russia’s Far East.  

The ministry’s Office of Foreign Assets Control (OFAC) suspects that some crude exports taken from the ESPO and shipped through Pacific ports, particularly Kozmino, may be trading above the Western price cap imposed last year.   

In December, the EU, G7, and allied countries imposed a $60 per barrel price cap on Russian oil. This measure prohibits Western shipping, insurance, and re-insurance companies from handling Russian cargoes unless they are sold at or below the set price. A similar restriction was introduced in February for exports of Russian petroleum products.   

OFAC said that US entities may have been “unaware that they are providing covered services involving Russian oil purchased above the price cap, as the non-US persons involved in the exports may have provided incomplete or false documentation or used other deceptive practices.”  

In the warning, the first of its kind related to the price cap, the US sanctions authority alleged that some tankers carrying Russian oil may be manipulating their automatic identification systems to disguise their movements at Kozmino or other ports. According to OFAC, this practice is known as “spoofing.”  

“For example, basic vessel tracking data may show the tanker at one location, but more sophisticated reporting from maritime intelligence services may show that the vessel called at the port of Kozmino or another eastern port in the Russian Federation,” OFAC explained, adding that spoofing can also be used to mask ship-to-ship transfers “carried out to disguise the origin of Russian oil.”  

The US sanctions watchdog warned that individuals or companies that evade, avoid, or violate the price cap could be subject to civil or criminal enforcement actions.

The warning advised commodities traders that shipping, freight and insurance costs are not included in the price cap, but stressed that failure to specify such costs could be used to hide purchases of Russian oil above the cap price.   

“A refusal by a counterparty to provide documentation showing Russian oil or Russian petroleum products were purchased at or below the price cap (when, for example, the total price inclusive of other costs is above the cap) should be considered a red flag for possible evasion of the price cap.”  

OFAC also urged traders to retain documents showing that Russian crude and oil products were purchased at or below the imposed ceiling.

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