US imposes sanctions on Russia's leading tanker group Sovcomflot

The US Treasury Department's Office of Foreign Assets Control (OFAC) has also identified 14 oil tankers as property in which Sovcomflot has an interest. The office issued a general license allowing the offloading of crude oil or other cargoes from these vessels for 45 days.

A senior official from the Treasury Department, during a phone call, stated that Sovcomflot, as the parent company, was involved in violations of price restrictions in addition to deceptive activity.

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.

A senior official told the agency that the US will not disclose the specific violations that Sovcomflot is accused of. However, the official added that the authorities used for these sanctions relate to activity in the Russian maritime sector, reflecting the company's work outside the price-limiting coalition.

Sanctions against the oil industry of the Russian Federation

Last year, the G7 countries, the EU, and Australia imposed a price cap on Russian oil delivered by sea at $60 per barrel. Similar restrictions came into effect for oil product supplies from Russia starting February 5, 2023.

Western sanctions have led to half of Russia's oil and oil product exports in 2023 going to China, while India's share has increased to 40% over two years. Europe's share in Russia's oil exports has dropped tenfold to approximately 4-5%.

In particular, about half of the 50 tankers sanctioned by the US Treasury on October 10, 2023, were unable to load since being added to the list.

On Friday, February 23, Washington imposed broad sanctions against Russia, targeting over 500 individuals and entities, to mark the second anniversary of Moscow's invasion of Ukraine and to retaliate for the death of Russian opposition leader Alexei Navalny.