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
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