US Treasury again sanctions entities, vessels for violating Russian oil price cap

For the second time in three weeks, the US Treasury Department has imposed new sanctions on entities and ships for carrying Russian crude oil above the G7-led $60/b price cap, as the US continues to ramp up sanctions enforcement to reduce the flow of funds to Russia's war coffers.

Treasury's Office of Foreign Assets Control Dec. 1 imposed sanctions on three entities and three vessels for violating the price cap, which took effect in December 2022.

"By targeting these companies and their ships, we are upholding the dual goals of the price cap by restricting Russia's profits from oil while promoting stable global energy markets," Wally Adeyemo, the deputy secretary of the Treasury, said in a statement.

The new sanctions come on the heels of similar sanctions in October and November.

The Dec. 1 sanctions target the vessels NS Champion, Viktor Bakaev, and HS Atlantica, which carried Russian Urals crude oil above $70/b after the crude oil price cap took effect, Treasury said in the statement. The vessels used US-person services while transporting the Russian-origin crude oil, the statement said.

Treasury also sanctioned the entities owning the vessels. Sterling Shipping Incorporated is based in the United Arab Emirates and owns the NS Champion, the statement said. UAE-based Streymoy Shipping Limited owns the Viktor Bakaev, and Liberia-based HS Atlantica Limited is the owner of HS Atlantica, Treasury said.

Russian crude prices have been above the price cap since July, though they have dropped below $70/b since Nov. 15. Platts assessed FOB Urals Primorsk at $65.83/b on Dec. 1, according to S&P Global Commodity Insights.

Links to Russia

The 110,043-dwt NS Champion and the 118,175-dwt Viktor Bakaev are ultimately controlled by Sovcomflot, according to S&P Global Maritime Intelligence Risk Suite.

The Russian state carrier did not immediately respond to an email seeking comment.

Previously, OFAC already put four tankers operated by Sovcomflot on the sanctions list, namely the SCF Primorye, the Kazan, the Ligovsky Prospect, and the NS Century.

Sovcomflot was sanctioned by the UK and the EU after Russia invaded Ukraine in February, but not directly by the US. OFAC had restricted US finance for the company before starting to sanction its ships recently.

While the company's operations were already significantly impaired by Western sanctions, OFAC's recent enforcement has appeared to add further pressure on Sovcomflot. Ports generally could be hesitant to receive sanctioned ships due to pressure from the US.

Data from S&P Global Commodities at Sea shows the SCF Primorye has been moored at Murmansk, Russia in recent weeks, Kazan lingering in South China Sea, Ligovsky Prospect in East China Sea, and NS Century between India and Sri Lanka.