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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.

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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.

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.

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. 

Related: IMO: Addressing ship-to-ship oil transfers and tankers in the ‘dark fleet’

 

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

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Environment

Singapore, Indonesia and Malaysia conduct table-top exercise to strengthen oil spill response

Exercise focused on several aspects including collaboration between government agencies and oil spill response firms to optimise oil spill response resources for incidents in Straits of Malacca and Singapore.

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The Maritime and Port Authority of Singapore (MPA) on Tuesday (11 February) conducted a table-top exercise (TTX) with Indonesia and Malaysia to enhance regional coordination and strengthen response capabilities for oil spills. The exercise brought together over 20 representatives from MPA, Indonesia’s Directorate General of Sea Transportation, Malaysia’s Environment Department, and oil spill response experts from ITOPF. As part of Singapore’s chairmanship of the Revolving Fund Committee (RFC) from April 2022 until March 2027, MPA led the TTX to foster collaboration between the littoral States of Indonesia, Malaysia and Singapore. The RFC, established through a memorandum of understanding (MOU) between the three littoral States and the Malacca Strait Council (MSC) in 1981, is a funding mechanism allowing each littoral State to draw cash advance from the Fund to combat oil spill from ships in the Straits of Malacca and Singapore (SOMS). The exercise focused on coordination procedures to ensure swift and clear communication between the littoral States during an oil spill incident, rapid deployment of oil spill response assets by the littoral States, and collaboration between government agencies and oil spill response companies to optimise oil spill response resources for incidents in the SOMS. The response strategies and asset deployment plans tested during the TTX will be exercised during a Ground Deployment Exercise between the three littoral States and ITOPF in 2026. Photo credit: Maritime and Port Authority of Singapore Singapore, Indonesia and Malaysia conducts table-top exercise to strengthen oil spill response

The Maritime and Port Authority of Singapore (MPA) on Tuesday (11 February) conducted a table-top exercise (TTX) with Indonesia and Malaysia to enhance regional coordination and strengthen response capabilities for oil spills. 

The exercise brought together over 20 representatives from MPA, Indonesia’s Directorate General of Sea Transportation, Malaysia’s Environment Department, and oil spill response experts from ITOPF.

As part of Singapore’s chairmanship of the Revolving Fund Committee (RFC) from April 2022 until March 2027, MPA led the TTX to foster collaboration between the littoral States of Indonesia, Malaysia and Singapore. 

The RFC, established through a memorandum of understanding (MOU) between the three littoral States and the Malacca Strait Council (MSC) in 1981, is a funding mechanism allowing each littoral State to draw cash advance from the Fund to combat oil spill from ships in the Straits of Malacca and Singapore (SOMS).

The exercise focused on coordination procedures to ensure swift and clear communication between the littoral States during an oil spill incident, rapid deployment of oil spill response assets by the littoral States, and collaboration between government agencies and oil spill response companies to optimise oil spill response resources for incidents in the SOMS.

The response strategies and asset deployment plans tested during the TTX will be exercised during a Ground Deployment Exercise between the three littoral States and ITOPF in 2026.

 

Photo credit: Maritime and Port Authority of Singapore
Published: 12 February, 2025

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LNG Bunkering

South Korea’s HJSC scores LNG bunkering vessel order from H-Line Shipping

HJ Shipbuilding & Construction has secured its first order of the year with a contract worth KRW 127.1 billion (USD 87.6 million) to build an 18,000㎥ LNG bunkering vessel for H-Line Shipping.

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South Korean HJSC scores LNG bunkering vessel order from H-Line Shipping

HJ Shipbuilding & Construction (HJSC) has secured its first order of the year with a contract worth KRW 127.1 billion (USD 87.6 million) to build an 18,000㎥ LNG bunkering vessel for H-Line Shipping. 

The contracted vessel is a large-scale LNG bunkering ship measuring 144 meters in length, 25.2 meters in width, and 12.8 meters in depth. It is capable of supplying up to 18,000㎥ of LNG in a single operation to LNG-fuelled ships. 

Equipped with two independent LNG tanks certified by the International Maritime Organization (IMO), the vessel features a dual-fuel propulsion system that allows it to operate on both eco-friendly LNG and marine diesel oil. This advanced system ensures both stability and operational efficiency while effectively reducing carbon emissions.

Yoo Sang-cheol, CEO of HJSC, said, “As global LNG demand and supply continue to grow, the LNG bunkering vessel market will see steady expansion.” 

“We will focus on strengthening our expertise in building eco-friendly, high-value-added ships, securing a competitive edge that aligns with our legacy as a leader in shipbuilding.”

This achievement follows the company's success in 2014 when it built the world’s first 5,100㎥ LNG bunkering vessel for Japan’s NYK Line.

“This accomplishment also reinforces South Korea’s shipbuilding industry's efforts to enhance competitiveness by securing high-efficiency, environmentally friendly vessels in the global market,” HJSC said. 

“Notably, with the anticipated expansion of oil and natural gas drilling and the resumption of LNG exports under the second Trump administration in the US, the market for crude oil carriers, LNG carriers, and LNG bunkering vessels is expected to see significant growth.”

“This trend is likely to benefit the country’s highly competitive shipbuilding industry.”

 

Photo credit: HJ Shipbuilding & Construction
Published: 12 February, 2025

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Bunker Fuel

AMSOL tanker “Uhambo” commences offshore bunkering operations in Algoa Bay

Firm announced that its product tanker Uhambo has started offshore bunkering operations in Algoa Bay, signalling that the service has resumed in the maritime bay of South Africa.

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AMSOL tanker “Uhambo” commences offshore bunkering operations in Algoa Bay

Marine services provider AMSOL recently announced that its product tanker Uhambo has started offshore bunkering operations in Algoa Bay, signalling that the service has resumed in the maritime bay in South Africa.  

“Now flying the South African flag and an important platform for the ongoing training and development of tanker-endorsed South African seafarers, the Uhambo has commenced offshore bunkering operations in Algoa Bay, delivering locally refined marine fuel on behalf of its oil industry client,” the company said in a statement shared with Manifold Times

In November 2024, the South African Revenue Services (SARS) released new protocols including amendments under sections 21, 60, and 120 of the Customs and Excise Act. Some amendments pertain to the storage of imported bonded fuel goods in designated customs and excise storage warehouses.

SARS' move was anticipated to facilitate bunkering to resume off Algoa Bay, which has been shut down since September 2023

AMSOL’s Chief Commercial Officer Graham Dreyden, said: “Our ability to comply with stringent operating regulations and legislation as well as international maritime and marine standards underpins AMSOL’s track record.”

“This is the case for operations in Algoa Bay and we have worked closely with authorities and relevant stakeholders to ensure all legislative requirements for offshore bunkering operations are met.”

AMSOL’s CEO Dan Ngakane said he is positive about the growth of the company and its broader impact. 

“We have acquired five vessels in the last 4 years in order to meet the needs of our clients in the region for reliable and professional, risk managed marine solutions,” he said.

“In leading growth in the South African maritime sector, we remain committed to meeting the highest standards for environmental protection, safety and compliance whilst developing the talent required to keep our industry growing and moving forward.”

AMSOL said it is the only marine services business operating in the region with a proven track record in effective management of risk-mitigated fuel transfers through a portfolio of services that include in-port bunker delivery, offshore bunkering, ship-to-ship fuel transfer services and offshore terminal management.

Related: ENGINE: SARS releases final rules for South Africa’s offshore bunkering
Related: SARS seeks public comments on amendments to bonded bunker fuel storage regulations
Related: South African Revenue Service issues media statement on detention of bunkering vessels
Related: ENGINE: Algoa Bay bunkering at a standstill as authority detains barges – sources
Related: ENGINE: Algoa Bay closure spurs surge in bunker calls at nearby ports

 

Photo credit: AMSOL
Published: 12 February, 2025

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