Business

OFAC issues warning on possible evasion of Russian oil price cap

OFAC is aware of reports ESPO and other crudes exported via Pacific ports in Russian Federation may be trading above the price cap and may be using covered services provided by U.S. persons.

Published

1 year ago

April 18, 2023

Admin

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Monday (17 April) issued an alert to warn U.S. persons about possible evasion of the price cap on crude oil of Russian Federation origin (Russian oil), particularly involving oil exported through the Eastern Siberia Pacific Ocean (ESPO) pipeline and ports on the eastern coast of the Russian Federation:

As explained in greater detail in OFAC Guidance on Implementation of the Price Cap Policy for Crude Oil and Petroleum Products of Russian Federation Origin (Price Cap Guidance), U.S. persons are authorized to provide certain services (covered services) related to the maritime transport of Russian oil as long as that oil was purchased at or below the relevant price cap. To implement the price cap policy, OFAC issued two determinations pursuant to Executive Order 14071, one for Russian oil and one for petroleum products (the crude determination and the petroleum products determination, or, collectively, the price cap determinations). U.S. persons providing covered services are required to reject participating in an evasive transaction or a transaction that violates the price cap determinations, and to report such a transaction to OFAC.

For ship owners, protection and indemnity clubs, and flagging registries

Deceptive Practices, Including AIS Manipulation to Disguise Russian Port Calls: OFAC is aware of reports that ESPO and other crudes exported via Pacific ports in the Russian Federation, such as Kozmino, may be trading above the price cap and may be using covered services provided by U.S. persons. These U.S. service providers may be unaware that they are providing covered services involving Russian oil purchased above the price cap, as the non-U.S. persons involved in the exports may have provided incomplete or false documentation or used other deceptive practices.

Specifically, some tankers may be manipulating their Automatic Identification Systems (AIS), a practice known as “spoofing,” to disguise the fact that they have called at the port of Kozmino or other ports on the Russian Federation’s eastern coastline. 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. Spoofing can also be used to mask ship-to-ship transfers carried out to disguise the origin of Russian oil. U.S. persons providing covered services to tankers should view AIS manipulation that disguises a tanker’s port of call in the Russian Federation as evidence of possible evasion of the price cap.

to provide certain services (covered services) related to the maritime transport of Russian oil as long as that oil was purchased at or below the relevant price cap. To implement the price cap policy, OFAC

issued two determinations pursuant to Executive Order 14071, one for Russian oil and one for petroleum products (the crude determination and the petroleum products determination, or, collectively, the price cap determinations). U.S. persons providing covered services are required to

reject participating in an evasive transaction or a transaction that violates the price cap determinations, and to report such a transaction to OFAC.

Recommended Measures to Ensure Price Cap Compliance: Good-faith actors, including shipowners and

other service providers, can use the recordkeeping and attestations described in the Price Cap Guidance to be afforded safe harbor from OFAC enforcement if someone causes them to inadvertently violate the price cap determinations. At the same time, U.S. service providers, especially ship owners, protection and indemnity clubs, and flagging registries, should be mindful of the risk of evasion for some ESPO and other crudes exported via Pacific ports in the Russian Federation and should take appropriate due diligence measures, such as:

Disseminating this alert to counterparties or members.
Using maritime intelligence services to improve detection of AIS manipulate

For commodities brokers/oil traders

Opaque Shipping Costs: As noted in the Price Cap Guidance, shipping, freight, customs, and insurance costs are not included in the price caps. The failure to itemize these costs can be used to obfuscate the fact that Russian oil was purchased above the price cap.

Recommended Measures to Ensure Price Cap Compliance: In order for Tier 1 actors (defined in the Price Cap Guidance as actors who regularly have direct access to price information, such as commodities traders) to be afforded the safe harbor explained in the Price Cap Guidance, they must retain documents showing that Russian oil or Russian petroleum products were purchased at or below the relevant price cap. Examples of these documents include invoices, contracts, and receipts/proof of payment. OFAC notes that such documents do not need to make any mention of the price cap in order for the Tier 1 actor to be afforded the safe harbor. However, shipping, freight, customs, and insurance costs must be invoiced separately from the purchase price of the Russian oil and must be at commercially reasonable rates. 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.

Photo credit: CHUTTERSNAP from Unsplash
Published: 18 April, 2023

Bunker Fuel

China: Zhoushan to host 7th IPEC commodities, bunker conferences on 16 to 17 October

Global marine bunker development will be among main topics of discussion at the 7th International Petroleum and Natural Gas Enterprises Conference (IPEC).

Published

1 day ago

October 11, 2024

Admin

China: Zhoushan to host 7th IPEC commodities, bunker conferences on 16 to 17 October

The 7th International Petroleum and Natural Gas Enterprises Conference (IPEC) is taking place at Zhoushan, Zhejiang province, China between 16 to 17 October.

The agenda, provided by the Zhoushan High-tech Zone Administrative Committee to foreign event media partner Singapore bunkering publication Manifold Times, is as follows:

16 October

Registration and sign-in for participating guests
Meetings between Zhejiang Provincial and Zhoushan Municipal leaders with VIPs

17 October

Morning

Plenary Session of the Conference (Oriental Hall, Zhoushan International Conference Center)

Leader’s speech, guest keynote speech, signing of major projects

Discussion Topics [*17 October, 2pm to 5pm]

Focus Topic Meeting: Global marine bunker development*
Location: Haitian Hall, Haizhongzhou International Hotel, Zhoushan

14:00-14:05 - Opening of the Meeting

14:05-14:15 - Speech by Leaders

14:15-14:30 - Announcement of "Top Ten Global Bunkering Ports" and "Top Ten Global Bunkering Companies"

14:30-14:40 - Announcement of Construction Work of Northeast Asia Bonded Marine Fuel Bunkering Hub

14:40-14:50 – Launch ceremony of Zhoushan "White-list" Bunker Barge Mass Flow Meter System Pilot Certification Programme

14:50-15:10 - Signing Ceremony

15:10-16:10 - Keynote speech

16:10-16:35 - Coffee break

16:35-17:05 - Roundtable forum (Topic: Facing green and low-carbon transformation in global shipping, how do marine fuels change in response to the trend?)

17:05-17:35 - Roundtable forum (Topic: The road to develop high-quality offshore fuel bunkering metering under the new developments)

17:35-17:40 - Moderator’s summary

Utilising financial innovation, futures and spot cooperation to promote the construction of a hub for the allocation of bulk commodity resources*
Location: Putuo Hall, Zhoushan International Conference Center

Open development of global shipping trade*
Location: Donghai Hall, Hilton Zhoushan

International iron ore trade development*
Location: Banquet Hall 1/3, The Westin Zhujiajian Resort, Zhoushan

Development of China's new chemical materials industry during the “15th Five-Year Plan”*
Location: Banquet Hall 1/3, The Westin Zhujiajian Resort, Zhoushan

Development of non-ferrous metal mining industry*
Location: Lianhua Ocean Hall, Hilton Zhoushan

16 and 17 October
International maritime law of the free trade port (zone)
Location: Fortune Hall, Zhoushan CaiFu Hotel

Photo credit: Zhoushan High-tech Zone Administrative Committee
Published: 11 October, 2024

Alternative Fuels

SIBCON 2024: Vitol anticipates securing LNG bunker licence in Singapore

‘It would be unthinkable not to deploy at least one of the three barges Vitol has on order in Singapore,’ says Vitol’s Head of Asia Mike Muller during a panel discussion.

Published

2 days ago

October 11, 2024

Admin

SIBCON 2024: Vitol anticipates securing LNG bunker licence in Singapore

Energy trader Vitol’s Head of Asia Mike Muller on Wednesday (9 October) said the company is anticipating being granted a LNG bunker licence in Singapore soon.

“It would be unthinkable not to deploy at least one of the three barges Vitol has on order in Singapore,” he said.

Mike Muller made the announcement during the Viewing the Energy Transition Through the Lens panel discussion at the 23rd Singapore International Bunkering Conference (SIBCON).

“We expect to see growth in LNG use as a bunker fuel for at least another decade, and probably longer,” he added.

On the increasing uptake of biofuels, he said Vitol is seeing demand for biofuel blended bunkers in Singapore roughly doubling every year at the moment, heading for around 1 million mt this year and maybe 2 million mt next year.

“Demand for 100% biofuel from shipping customers is also starting to pick up as of this year and we have led the way in commissioning new IMO type 2 barges to fulfil this demand - indeed an important Asian customer of ours has taken three deliveries of B100 UCOME biofuel just in recent weeks here in Singapore,” Muller explained.

Manifold Times previously reported Vitol securing three LNG Bunkering Vessels (LNGBV) through its shipping company, Vitol International Shipping Pte Ltd (VIS).

The vessels were secured via a seven to ten year time charter agreement with Avenir LNG Limited (Avenir) and an order for two vessels at the CIMC Sinopacific Offshore & Engineering Co. Ltd shipyard in Nantong, China.

The time charter agreement with Avenir is for one newbuild 20,000m3 LNGBV. The time charter will commence at delivery from the shipyard in China in Q4 2026 and will serve a period of seven years with options to extend up to ten years in total

Vitol also ordered one 12,500 m3 and one 20,000 m3 LNGBV at the CIMC SOE shipyard in China. The vessels will be delivered in Q4 2026 and Q3 2027 respectively.

Photo credit: Vitol
Published: 11 October, 2024

Bunker Fuel

SIBCON 2024: Bunker players sign SCMA pledge to drive progress within Maritime Singapore

Bunker players involved include Consort Bunkers, Equatorial Marine Fuel, Golden Island, Hong Lam Marine, Kenoil Marine Services, Marubeni International Petroleum and Sinopec Fuel Oil.

Published

2 days ago

October 11, 2024

Admin

SIBCON 2024: Bunker players sign SCMA pledge to drive progress within Maritime Singapore

Some 10 bunker players on Tuesday (8 October) signed a pledge with Singapore Chamber of Maritime Arbitration (SCMA) at the 23rd Singapore International Bunkering Conference and Exhibition (SIBCON).

The bunker players involved are Consort Bunkers Pte Ltd, Equatorial Marine Fuel Management Services Pte Ltd, Fratelli Cosulich Bunkers (S) Pte Ltd, Global Energy Trading Pte Ltd, Golden Island Pte Ltd, Hong Lam Marine Pte Ltd, Kenoil Marine Services Pte Ltd, Marubeni International Petroleum (S) Pte Ltd, Sinopec Fuel Oil (Singapore) Pte ltd and Victory Pte Ltd.

SCMA and the pledgees will work together to promote and enhance the capabilities and opportunities within the Maritime Singapore community and ecosystem.

Among the aspirational goals embodied by the SCMA Pledge is that the pledgees give preferential consideration, where appropriate, for the use of the SCMA Arbitration Rules for the resolution of their maritime or international trade disputes.

The bunker players may also use its best endeavours to support the Maritime Singapore community and ecosystem, including contributing to the development and dissemination of best practices as well as providing support and opportunity to young maritime legal and dispute resolution professionals in the form of internships, mentorships, and educational seminars aimed at fostering the next generation of maritime leaders.

SCMA, a specialist arbitration institution, is the only arbitration institution in Singapore focused on maritime and international trade disputes.

It offers the maritime and international trade sectors a set of arbitration rules and guidelines which are flexible and cost effective.

Users of SCMA arbitration include maritime companies, international traders and commodity companies for the resolution of their disputes such as those involving charterparty, bunker, commercial sales, cargo, oil and gas, shipbuilding and ship repair.

Photo credit: Singapore Chamber of Maritime Arbitration
Published: 11 October, 2024