Russian crude oil prices: UAE shipping company faces penalties from the US for exceeding the $60 ceiling

On Thursday, the United States imposed sanctions on a shipping company based in the United Arab Emirates for transporting Russian crude oil above the $60 per barrel price ceiling.

As of right now, the U.S. Treasury has designated Hennesea Holdings Limited and its eighteen vessels as blocked property, marking the first enforcement action against the oil price cap of 2024. Americans are no longer able to do business with them.

Treasury Deputy Secretary Wally Adeyemo stated, “Today’s actions once again demonstrate that anyone who violates the price cap will face the consequences.” “There is no reason to doubt our coalition’s resolve to root out those who support the Kremlin.”

Hennesea Holdings’ representative was not immediately reachable for comment.

Australia, the Group of Seven, the United States, and the European Union set a $60 per barrel ceiling on Russian oil in 2022.

Any purchases over the cap would be against the terms of the agreement. The cap was intended to force the Russian government to sell its oil at a discount or divert funds for an expensive alternative shipping network to deny the Kremlin the money it needs to finance its war in Ukraine.

Due to alleged price cap violations, businesses in Turkey, Hong Kong, and the United Arab Emirates were singled out for economic sanctions last year.

Price caps were implemented with equal parts optimism and skepticism that they would prevent Russian President Vladimir Putin from invading Ukraine.

The allied countries have imposed thousands of sanctions on Russia in addition to the price cap during the war, which will enter its third year next month. Sanctions are aimed at manufacturing, imports of technology, bank and financial transactions, and Russians with ties to the government.

SUMMARY

• The US has imposed sanctions on Hennesea Holdings Limited, a shipping company in the UAE, for transporting Russian crude oil above the $60 per barrel price ceiling.
• The US Treasury has designated Hennesea Holdings Limited and its eighteen vessels as blocked property, marking the first enforcement action against the 2024 oil price cap.
• The action demonstrates the coalition’s resolve to root out those supporting the Kremlin.
• The $60 per barrel price cap was set by Australia, the Group of Seven, the US, and the EU in 2022.
• The cap aimed to force the Russian government to sell its oil at a discount or divert funds for alternative shipping networks.

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