Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

US imposes sanctions on Russia's leading tanker group Sovcomflot

Published 02/23/2024, 04:00 PM
Updated 02/24/2024, 11:08 AM
© Reuters.

By Timothy Gardner and Daphne Psaledakis

WASHINGTON (Reuters) -The U.S. has imposed sanctions on Russia's leading tanker group Sovcomflot as Washington seeks to reduce Russia's revenues from oil sales it can use to support the invasion of Ukraine, the Treasury Department said on Friday.

Russia is one of he world's top oil exporters and the sanctions were the latest in an effort by Western countries to add costs on the shipping of its crude oil and oil products while keeping the petroleum flowing to global markets.

The Treasury's Office of Foreign Asset Control also designated 14 crude oil tankers vessels as property in which Sovcomflot has an interest.

OFAC issued general licenses allowing the offloading of crude oil, or other cargoes, from the 14 vessels for 45 days, and allowing transactions with all other Sovcomflot tankers.

"Sovcomflot as a whole, as a parent company, has been implicated in price cap violations in addition to deceptive activity," a senior Treasury official told reporters in a call.

The sanctions freeze any U.S. assets of those targeted and generally bars Americans from dealing with them.

The G7, the EU and Australia imposed a $60 per barrel price cap on Russian oil in late 2022. It bans the use of Western maritime services such as transport, insurance and financing for shipments of oil priced at or above the cap.

"The designations today are basically intended to take some of their vehicles for doing that off the table, which is going to force them to invest more in spending, in creating new avenues for getting that oil out," the Treasury official said.

The Western sanctions and the cap have forced some of Russian oil sales to rely on a so-called shadow fleet of aging tankers that ship consumers like India and China, much further than its traditional consumers in Europe. Treasury officials say those expenses reduce Moscow's revenues that it can use for war.

The U.S. would not disclose what the specific violations Sovcomflot was accused of, the senior official said.

The official, however, added that the authority used for these sanctions relates to operating in the Russian maritime sector, reflecting the company's work outside the price cap coalition.

Earlier on Friday, Washington imposed wide-ranging sanctions against Russia, targeting more than 500 people and entities to mark the second anniversary of Moscow's invasion of Ukraine and retaliate for the death of Alexei Navalny, the Russian opposition leader.

© Reuters. Crude oil tanker Nevskiy Prospect, owned by Russia's leading tanker group Sovcomflot, transits the Bosphorus in Istanbul, Turkey September 6, 2020. REUTERS/Yoruk Isik

The Treasury began enforcing the price cap in October, and before Friday had sanctioned 27 tankers for violating the price cap. Many of those tankers have been anchored off ports since being sanctioned, shipping data has shown.

Treasury said that the increased sanctions enforcement in recent months is forcing Russia to sell oil at a steeper discount to the international benchmark Brent crude, limiting Russia's revenue. The discount has widened to about $19 per barrel over the past month compared with $12 to $13 a barrel in October, it said.

Latest comments

have been very lucky ever since I met this man he has directed me on so many trade in which I have earned a lot through out last week having this person by my side is one of the best thing that has ever happened because he is good to me he is very supportive even when the market is low he makes it higher with he trading technics try him he is the best of all time °°° watap ÷31-61-257-43-18°°°°° 010101010010101001010101010101010101010101010010101010101001010101001010101010010101101010101010011010101010010110100110011010101010101010101010101010101010101010101010101101010101010101010101010101010101010101010101010101010101010101010101010101010101010101010101001101010101010
so many Maga supporters of the corrupt incompetent Donald trump and the Russian dictatorship today.
Who cares
It has been over 2 years and these magical sanctions have only made Russia stronger. The definition of insanity is trying the same thing over and over and expecting a different result.
ridiculous... Within few week the ships get under new company with new names. You are still two steps behind Russia
Trump will straighten up this mess that biden has made
Yeah, he  would probably put America's hands up without fight.
US adds more useless sanctions, while American companies still do business in Russia. It's time to get a leader back in the white house and start negotiating
like Steve Bannon
Name the companies, please.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.