U.S. Sanctions 18 Tankers for Russian Oil Price Cap Violations
The United States launched its fourth round of sanctions targeting tankers and shipping companies violating the price cap on Russian oil. While much of the global focus is on the Red Sea where the U.S. is also using sanctions in an attempt to reign in Iran and its funding of the Houthis, they have also vowed to use sanctions to enforce the restrictions imposed on the Russian oil trade.
“Today’s actions once again demonstrate that anyone who violates the price cap will face the consequences,” said Deputy Secretary of the Treasury Wally Adeyemo. “No one should doubt our coalition’s commitment to stopping those who help the Kremlin.”
The latest actions build on the prior listing of a tanker in December for transporting oil above the price cap imposed by the U.S. and its allies. In April 2023, they released a warning regarding possible tactics to avoid the price cap and after revising the rules in October began a series of enforcement efforts.
The U.S. is adding a United Arab Emirates-based shipping company, Hennesea Holdings to the list of blocked companies for violations of the price cap. Treasury Department officials contend that Hennesea was established in late 2022, shortly before the price cap went into effect. They said the company acquired 18 older tankers that have repeatedly been used to ship Russian crude oil and petroleum products. They contend the ships ultimately owned by Hennesea have repeatedly conducted port calls in Russian Federation ports.
The first round of sanctions against tankers was launched in October, followed by a second wave in mid-November. In December, the U.S. then added more tankers and their managers to the list, including the 2006-built HS Atlantica. Registered in Liberia and managed out of India, the 115,000 dwt tanker they said had been transporting Russian oil sold above the $60 price cap.
Hennesea is now being identified as the ultimate owner of the tanker, which has had four different names in the past eight years. Today, OFAC re-identified the HS Atlantica as a property in which Hennesea has an interest and added it to the list of block properties. They also listed the 17 other tankers they believe are beneficially owned by the company.
As a result of the listing, the vessels are blocked from the trade and from U.S. companies trading with the tankers. With over 400 tankers reported to be involved in the trade, analysts have said the efforts are having little impact. However, tracking data has shown that some of the blocked vessels were turned away from India after the U.S. listed them and others appear to have been idled off various ports in Europe. HS Atlantica for example spent the first half of December in the anchorage off Malta after she was listed and since December 19 she appears to be holding off Turkey in the anchorage at Istanbul. Her AIS signal currently says “not under command.”
U.S. officials have vowed to continue to use the sanctions to cut into Russia’s oil income and now to target the sources funding the Houthi rebels in Yemen. Yesterday they redesignated the Houthis as a terrorist group and U.S. officials said they would increase the sanctions to target the Houthis while attempting to avoid efforts that would hurt the citizens of Yemen.