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US blacklists 14 Russian oil tankers to enforce price cap

AFP . Washington
24 Feb 2024 11:28:24 | Update: 24 Feb 2024 11:28:24
US blacklists 14 Russian oil tankers to enforce price cap
An aerial view shows the Sunny Liger, a Marshall Islands-flagged tanker with a consignment of Russian diesel, anchored in the North Sea, near IJmuiden — AFP File Photo

The United States blacklisted 14 Russian oil tankers Friday as it sought to cut Moscow's petroleum revenues by enforcing a price cap imposed by the West after the Ukraine invasion.

The Treasury Department imposed sanctions on state-run shipping company Sovcomflot and said it was giving 45 days for the offloading of oil or other cargo from 14 of its ships before enforcement.

The price ceiling is aimed at limiting Kremlin profits while still allowing supplies to energy markets.

"Today, we take the next step by targeting Russia's largest state-owned shipping company and fleet operator, dealing a huge blow to their shadow operations," Deputy Treasury Secretary Wally Adeyemo said in a statement.

"We are entering the next phase of increasing Russia's costs in a responsible manner to mitigate risks," he added.

Previously, 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.

But a senior Treasury official told reporters Friday that the Kremlin has sought to evade the cap by investing in a "shadow fleet" of energy market trading infrastructure.

This operated outside of coalition services, allowing Moscow to earn higher prices on its oil in the summer and fall.

That is why Washington is focused on intensifying enforcement actions while also "increasing the cost to Russia of using that shadow fleet, of moving oil outside the price cap's reach," the official said on condition of anonymity.

Since the price ceiling was enacted, Russia has seen revenue fall.

The actions come on the eve of the second anniversary since Russia's invasion of neighboring Ukraine.