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US Imposes Sanctions on Russia's Leading Tanker Group Sovcomflot

Maritime Activity Reports, Inc.

February 23, 2024

© Andriy Sharpilo / Adobe Stock

© Andriy Sharpilo / Adobe Stock

The U.S. Treasury said on Fridayit has imposed sanctions on Russia's leading tanker group Sovcomflot FLOT.MM, as Washington seeks to reduce Russia's revenues from oil sales that it can use to support its invasion of Ukraine.

The Treasury Department's Office of Foreign Asset Control also designated 14 crude oil tankers vessels as property in which Sovcomflot has an interest. It issued a general license allowing the offloading of crude oil, or other cargoes, from the vessels for 45 days.

"Sovcomflot as a whole, as a parent company, has been implicated in price cap violations in addition to deceptive activity," a senior Treasury official told reporters in a call.

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 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.

The U.S. would not disclose what the specific violations Sovcomflot was accused of, the senior official said.

The official, however, added that the authority used for these sanctions relates to operating in the Russian maritime sector, reflecting the company's work outside the price cap coalition.

Earlier on Friday, Washington imposed wide-ranging sanctions against Russia, targeting more than 500 people and entities to mark the second anniversary of Moscow's invasion of Ukraine and retaliate for the death of Alexei Navalny, the Russian opposition leader.


(Reuters - Reporting by Daphne Psaledakis, Timothy Gardner and Andrea Shalal; Editing by Leslie Adler and Marguerita Choy)

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