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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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Biofuel

NYK to launch Japan’s first antioxidant for biodiesel bunker fuel in August

When added to biofuel, BioxiGuard slows progression of oxidative degradation and helps deter issues such as metal corrosion, strainer blockage, and cleaning-system fouling often triggered by oxidised fuel.

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Japan’s first antioxidant by NYK for biodiesel bunker fuel set to release in August

Nippon Yuka Kogyo (Nippon Yuka), an NYK Group company specialising in chemical R&D as well as the manufacture and sale of chemical products, on Wednesday (21 May) announced the upcoming release of BioxiGuard, the Japan’s first antioxidant specially developed for marine biodiesel, from 10 August.

NYK said compared with conventional petroleum-based fuels, biofuel contains a higher proportion of unsaturated fatty acids, making it more susceptible to oxidative degradation. Once oxidised, the biofuel can produce acidic substances and sludge, adversely affecting vessel fuel efficiency by reducing the fuel’s calorific value.

Developed by Nippon Yuka based on property analyses of the biofuel used in NYK-operated vessels, BioxiGuard is specifically formulated to enhance the oxidation stability of biodiesel. When added to biofuel, BioxiGuard slows the progression of oxidative degradation and helps deter issues such as metal corrosion, strainer blockage, and cleaning-system fouling often triggered by oxidised fuel.

According to laboratory tests conducted by Nippon Yuka researchers, the addition of BioxiGuard at a concentration of 1 part per 500 resulted in an approximate 50% reduction in the rate of biofuel degradation compared to untreated biofuel. 

This significant improvement underscores the potential for vessel operators to not only extend the useful life of biofuel on board but also maintain more stable and cost-effective vessel operations.

 

Photo credit: NYK
Published: 22 May, 2025

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Wind-assisted

Dealfeng to equip Singapore-based Hung Ze’s chemical tankers with rotor sails

Project marks Chinese firm Dealfeng’s first overseas commercial contract for its wind-assisted propulsion technology which entails equipping a new series of 14,000 DWT chemical tankers with Dealfeng Rotor Sails.

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Singapore-based Hung Ze chemical tankers to be equipped with Dealfeng rotor sails

Dealfeng, a Chinese provider of wind-assisted propulsion systems, on Tuesday (20 May) said it has assigned a cooperation agreement with Singapore-based shipowner Hung Ze Shipping.

The partnership will equip a new series of 14,000 DWT chemical tankers with Dealfeng® Rotor Sails. 

Each vessel will feature a 5m x 24m Dealfeng Rotor Sail installed on its forecastle deck. Collaborating with maritime software leader NAPA, the project will utilise route optimisation systems to maximise the efficiency of wind-assisted voyages, further enhancing fuel savings and emissions reduction while improving overall energy performance.

“The first vessel in the series is scheduled for delivery with the rotor sail system in the fourth quarter of 2025. Preliminary calculations indicate that the technology will achieve approximately 8% fuel savings on the vessel’s trading routes,” the company said in a social media post. 

The project marked Dealfeng’s first overseas commercial contract for its wind-assisted propulsion technology.

Dealfeng, a clean energy technology company specialising in the R&D, manufacturing, and EPC services of shipborne energy-saving systems, has long focused on developing Wind Assisted Propulsion Systems (WAPS). Its core product, the Rotor Sail, harnesses wind energy via the Magnus effect to provide auxiliary propulsion for vessels. 

Tailored to different ship types, the system offers fuel and carbon emission reductions of 5%–25%, with even greater efficiency under favorable wind conditions. Dealfeng’s Rotor Sail technology has obtained certifications from multiple classification societies and has been successfully deployed across numerous vessels, accumulating years of operational experience that validate its safety, reliability, and effectiveness.

Hung Ze operates a diverse fleet ranging from 5,000 DWT vessels to MR product tankers. 

 

Photo credit: Dealfeng
Published: 22 May, 2025

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Newbuilding

Höegh Autoliners latest LNG dual-fuel PCTC en route to Shanghai for bunkering

The 9,100 CEU “Höegh Sunrise”, currently sailing the seas, is on its way to Shanghai for bunkering before sailing to Japan and then towards Europe.

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Höegh Autoliners latest LNG dual-fuel PCTC en route to Shanghai for bunkering

Höegh Autoliners on Tuesday (20 May) said its latest liquefied natural gas (LNG) dual-fuel pure car and truck carrier has departed China Merchants Heavy Industry’s yard, ready to commence its commercial operations.

The 9,100 CEU Höegh Sunrise, currently sailing the seas, is on its way to Shanghai for bunkering before sailing to Japan and then towards Europe. 

The PCTC is the fifth in a series of 12 Aurora Class vessels built by the shipyard in China. The first eight Auroras are or will be equipped with engines primed to run on LNG and low-sulphur oil. 

These vessels can be converted to run on ammonia later. By 2027, Höegh Autoliners said the four last vessels of the series will be able to run net zero on ammonia directly from the yard when delivered.

Manifold Times previously reported the naming ceremony of Höegh Autoliner’s fourth Aurora Class newbuild, Höegh Sunlight, at Taicang Haitong Auto Terminal.

Related: Höegh Autoliners names LNG-powered RoRo ship “Höegh Sunlight” in China|
Related: Gasum completes SIMOPS LNG bunkering operation of PCTC “Höegh Sunlight”

 

Photo credit: Höegh Autoliners
Published: 22 May, 2025

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