United States Cracks Down On Ghost Fleet Used for Evading Russian Oil Price Cap

The U.S. Treasury Department issued sanctions on 12 October on two oil tankers, registered in the United Arab Emirates and Turkey, for transporting Russia’s oil above the G7 price cap of $60 per barrel while availing of the U.S. services. That same day, the U.S. had warned of a shadowy fleet of ships being used to move cargo from sanctioned nations.

The U.S., with other G7 nations, reportedly implemented a $60 price cap on Russia’s oil in December 2022. The move was triggered by Russia’s invasion of Ukraine and was supposed to lower Russian wartime energy profits while keeping oil markets more open. On Thursday, the West Texas Intermediate crude oil kick-started at about $85.37 for a barrel.

Further, the price cap has resulted in a rise of “ghost” vessels — older and insufficiently certified and insured vessels — being used for shipping Russian oil as more mainstream vessels shift from shipping cargo from Russia, per a Reuters report.

The share of Russia’s oil being loaded onto the EU-based vessels has dropped to approximately 20% in October from 35% in July, an analyst associated with Vortexa, Ioannis Papadimitriou, informed Reuters.

Papadimitriou said that the trend would help swell the ghost fleet in the long run.

A shadow trade has become more pronounced, involving cargo and actors affiliated with nations and people subject to sanctions or associated with other illicit activities, per the Treasury Department in its advisory.

The department recommends that the industry works with vessels with the most appropriate maritime insurance coverage and certification from the International Association of Classification Societies and that they broadcast their location continuously from the automatic identification systems.

References: The Messenger, The Hindu

Disclaimer :
The information contained in this website is for general information purposes only. While we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.

In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.