US sanctions Emirati tanker owner for violating Russian oil price cap

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on a United Arab Emirates-based shipowner for violating the price cap on Russian crude oil exports.

Sanctions were placed on Hennesea Holdings as the beneficial owner of 18 ships, including the 2006-built aframax HS Atlantica ex-Beks Atlantica, which OFAC previously identified as having engaged in the transport of Russian crude priced above the cap while using a covered US-based provider.

Hennesea was established in late 2022, shortly before the price cap was enacted. OFAC said the company acquired older tankers that have repeatedly conducted port calls in Russian Federation ports to ship crude and petroleum products. Shipping databases show a fleet of nearly 30 ships acquired by Hennesea in 2022 and 2023, with an average age of about 17 years.

The treasury’s first oil price cap enforcement action of 2024 blocks shippers’ access to US-owned property and prevents US individuals and firms from doing business with them.

“Today’s actions once again demonstrate that anyone who violates the price cap will face the consequences,” said Wally Adeyemo, deputy secretary of the treasury, adding: “No one should doubt our coalition’s commitment to stopping those who help the Kremlin.”  

The Group of 7 Nations and Australia, known as the price cap coalition, agreed in 2022 to cap Russia’s oil export prices at $60 per barrel. However, an increasing fleet of so-called shadow tankers and certain buyers paying more than the officially reported oil price has enabled Moscow to avoid price restrictions.

In December, the price cap coalition also tightened compliance rules for insurance firms and shippers. This move will require service providers, including shippers and movers of Russian oil, to receive attestations from their purchasers and sellers each time they lift or load Russian oil. It will also require insurance and freight firms to share these documents upon request with entities further down the supply chain.