The US imposed sanctions against two firms for violating oil price ceilings

Turkish Ice Pearl Navigation and UAE-registered Lumber Marine, as well as two tankers they owned, were subject to US sanctions due to violation of the price ceiling for Russianoil

The United States has imposed sanctions against Ice Pearl Navigation, a company registered in Turkey, and Lumber Marine, based in the UAE, in connection with violation of the price ceiling for Russian oil and petroleum products, the US Treasury said in a statement.

Tankers belonging to them were also subject to sanctions: SCF Primorye (Lumber Marine) and Yasa Golden Bosphorus (Ice Pearl Navigation).

At the same time, Washington allowed a number of operations with vessels subject to restrictions until January 8 next year. Thus, it is allowed to provide:

safe docking and anchoring of these tankers in port; maintaining the HEALTH or safety of ship crews; emergency tanker repairs or “environmental mitigation or environmental protection activities.”

Along with the addition of the sanctions list, the US Treasury issued recommendations on compliance with the price ceiling for Russian oil, noting the growth of “shadow” trade. The document also talks about the “shadow fleet” - ships that participate in such trade. According to OFAC, they tend to be older vessels and are often registered under the flag of states that are “not complying with their international obligations.” “There is also an increased risk of registration falsification,” the publication notes.

The G7 countries, the EU, Switzerland and Australia introduced a price ceiling for Russian oil in December 2022. The restrictions do not allow companies from countries that have joined the restriction to provide transport, insurance and financial services for Russian oil and oil products if they are sold at a price above the established limit of $60 per barrel.

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In response , RUSSIA refused to supply its oil to countries that joined the price ceiling and redirected supplies to friendly countries. According to Deputy Prime Minister Alexander Novak, supplies to China, India and other markets have increased.

Against the backdrop of market restructuring, Russian oil and gas revenues fell sharply - by 47% year-on-year (according to July data). To correct the situation, the Russian authorities at the beginning of 2023 began to gradually reduce the discount on oil from $34 per barrel to $25.

According to the Russian Ministry of Finance, the average price for Russian Urals oil in August of this year was $74 per barrel. Over the eight months of 2023, the average price of Urals was below the western limit, $56.58 per barrel, and less than in January-August 2022 ($82.13). On September 19, Brent oil prices reached $95 per barrel for the first time since November 2022.

The Financial Times wrote at the end of September that Russia had managed to avoid an oil price ceiling for most of its exports. According to the analytical company Kpler, 75% of Russian oil supplies in August were carried out without Western insurance - the main lever of influence on compliance with the price ceiling.

In early September , REUTERS reported that the G7 countries ( UK , Germany , Italy , CANADA , France , Japan and the usa) do not plan to revise the price ceiling for Russian oil in the near future.