OFAC provides details of Russia oil price cap

The US Treasury has published ‘Prohibitions on Certain Services as They Relate to the Maritime Transport of Crude Oil of Russian Federation Origin’ – pursuant to Section 1(a) (ii) of Executive Order 14071.

The prohibitions, which take effect on 12.01am eastern standard time, 5 December ‘shall apply to the following categories of services as they relate to the maritime transport of crude oil of Russian Federation origin:

• Trading/commodities brokering;
• Financing; • Shipping;
• Insurance, including reinsurance and protection and indemnity;
• Flagging; and
• Customs brokering.’

As a result, the following are prohibited, ‘except to the extent provided by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control: the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any of the Covered Services to any person located in the Russian Federation.’

‘Notwithstanding that prohibition, the Covered Services are hereby authorized when the price of the crude oil of Russian Federation origin does not exceed the relevant price cap determined by the Secretary of the Treasury, in consultation with the Secretary of State.’

At the same time, OFAC has published Price Cap Policy Guidance and general licences, which make exceptions for:

• Imports into Croatia and Bulgaria and landlocked EU Member States;
• Transactions ordinarily incident and necessary to addressing vessel emergencies related to the health or safety of the crew or environmental protection, including safe docking or anchoring, emergency repairs, or salvage operations; and
• Transactions related to the maritime transport of crude oil originating from the Sakhalin-2 project…provided that the Sakalin-2 byproduct is solely for importation into Japan.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221122