US issues first sanctions over Russia oil price cap

The United States said Thursday it is imposing sanctions on two companies for violating a price cap on Russian crude oil aimed at narrowing Moscow’s income after its invasion of Ukraine.

A coalition involving the Group of Seven leading economies, the European Union and Australia set a price cap of $60 per barrel of Russian crude in December to restrict Russia’s oil revenue, while ensuring it keeps supplying the global market.

ALSO READ: Oil soars as Hamas attack on Israel sparks war

A vessel owned by United Arab Emirates-based Lumber Marine was found to have violated that policy, the US Treasury Department said, as it carried Russian-origin crude priced at more than $75 a barrel.

The department also sanctioned Ice Pearl Navigation Corp, based in Turkey, whose vessel carried such crude oil priced above $80 a barrel.

Both vessels used US-based service providers when transporting the oil of Russian origin — and the sanctions could impact the companies’ involvement in global trade.

ALSO READ: Ukraine welcomes oil price cap set to ‘destroy’ Russia’s economy

“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 Treasury Secretary Wally Adeyemo in a statement.

A separate notice by the G7 and Australia noted that Russian oil tax revenue was 45 percent lower in the January to August period this year, compared with 2022.

“Where we have evidence that companies or persons have engaged in illicit or deceptive practices related to shipments of Russian origin crude oil and petroleum products, we will respond,” the statement said.

A Treasury official who spoke on condition of anonymity to reporters added that going forward, authorities will continue working with industry while taking public action to further discipline the market.

ALSO READ: Oil prices extend losses but European gas highest since March

The official described the latest move as a new phase of efforts involving the price cap.