Economy

OFAC delivers Russian Oil Price Cap Alert over evasion methods

The Price Cap Coalition issued an “Oil Price Cap Compliance and Enforcement Alert.” It covers Russia’s evasion strategies for circumventing the price cap.

The Western coalition adopted this measure to limit Russia’s ability to fund its war against Ukraine through the sale of its oil. The Price Cap prohibits maritime providers from engaging with Russian-origin crude oil that exceeds $60 per barrel in price.

The enforcement alert identifies sanctions evasion methods that industry stakeholders need to diligently monitor.

First, there are opaque shipping and extra costs as a result of attempts to conceal price, shipment, customs, and insurance fees.

Second, the use of a complicated supply chain, third-party middlemen, and shell firms to conceal the origin of Russian oil. It includes frequent changes in ownership of vessels.

Third, the use of Russia’s “shadow fleet,” made up of old vessels with hidden ownership that do not adhere to industry standards.

Stakeholders must raise red flags in such cases and actively conduct due diligence to prevent Russia from evading the oil price cap.

Mike

Media analyst and journalist. Fully committed to insightful, analytical, investigative journalism and debunking disinformation. My goal is to produce analytical articles on Ukraine, and Europe, based on trustworthy sources.

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