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OFAC sanctions tanker owners for Russian price cap violations

Sanctions have been imposed on United Arab Emirates-based Lumber Marine and Turkiye-based Ice Pearl Navigation, which operated tankers carrying Russian cruise oil priced above USD 60 price cap.

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The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Thursday (12 October) sanctioned two tanker owners and identified two vessels as blocked property that used Price Cap Coalition service providers while carrying Russian crude oil above the Coalition-agreed price cap. 

“This action underscores the Treasury Department’s commitment with its international partners to responsibly reducing Russian government oil profits and constraining the Russian war machine,” OFAC said in a statement. 

The crude oil price cap took effect in December 2022 with a cap on Russian crude oil at USD 60 per barrel. The United States is part of an international coalition (the Price Cap Coalition), including the G7, the European Union, and Australia, that have agreed to prohibit the import of crude oil and petroleum products of Russian Federation origin.

OFAC said United Arab Emirates-based Lumber Marine SA’s tanker SCF Primorye carried Novy Port crude oil priced above USD 75 per barrel from a port in the Russian Federation after the crude oil price cap took effect. 

Turkiye-based Ice Pearl Navigation Corp’s tanker YasaGolden Bosphorus carried ESPO crude oil priced above USD 80 per barrel after the crude oil price cap took effect. 

Both the SCF Primorye (IMO 9421960) and the Yasa Golden Bosphorus (IMO 9334038), which conducted port calls in the Russian Federation, used U.S.-based service providers while transporting the Russian origin oil.

“Lumber Marine SA and Ice Pearl Navigation Corp were both designated pursuant to Executive Order 14024 for operating or having operated in the marine sector of the Russian Federation economy. OFAC also identified the SCF Primorye and the Yasa Golden Bosphorus as property in which Lumber Marine SA and Ice Pearl Navigation Corp, respectively, have an interest,” OFAC said. 

“As a result of today’s action, all property and interests in property of the persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.”

“Today’s action demonstrates our continued commitment to reduce Russia’s resources for its war against Ukraine and to enforce the price cap,” said Deputy Secretary of the Treasury Wally Adeyemo. 

“We remain committed to implementing a price cap policy that has two goals: reducing the oil profits upon which Russia relies to wage its unjust war against Ukraine and keeping global energy markets stable and well-supplied despite turbulence caused by Russia’s unprovoked invasion of Ukraine. We will continue to take actions to achieve these two goals.”

In addition to today’s sanctions actions, the Price Cap Coalition has also published a Coalition Advisory for the Maritime Oil Industry and Related Sectors

The Advisory, which is directed at both government and private sector actors involved in the maritime trade of crude oil and refined petroleum products, provides recommendations concerning specific best practices and reflects our commitment to promoting responsible practices in the industry, preventing and disrupting sanctioned trade, and enhancing compliance with the price cap.

Photo credit: tommao wang on Unsplash
Published: 16 October, 2023

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