The United States on February 8 imposed fresh sanctions for alleged violations of an oil price cap set by the Group of Seven (G7) nations and took steps to further restrict the importation of certain categories of diamonds mined in Russia, the U.S. Treasury Department said.
The Treasury Department said in a news release that its Office of Foreign Assets Control (OFAC) was taking the oil price cap enforcement action -- the second this year -- by designating four entities for sanctions and blocking one vessel suspected of hauling oil priced above the cap.
The entities and the vessel were involved in a price cap violation scheme in late 2023, the department said.
“Russia’s own top energy official admits that the coalition’s price cap and our sanctions have led to widening discounts on Russian oil, limiting the revenue the Kremlin relies on for its illegal war,” said Brian Nelson, undersecretary for terrorism and financial intelligence.
The actions announced on February 8 should serve as a continued warning that the United States “can and will enforce violations of the cap,” he said in the news release.
The G7 industrialized countries imposed the price cap on seaborne Russian crude oil in December 2022 in response to Russia's invasion of Ukraine. The price cap, which the European Union and Australia later joined, aims to reduce the amount of oil revenues Russia earns from oil while maintaining a stable global energy market.
The price cap works by prohibiting shippers and companies that offer insurance, finance, and other services from handling cargoes of Russian crude unless it is sold at or below the $60 price cap. The world's key shipping and insurance firms are based in the countries that are in the international price cap coalition, giving them leverage to set the price cap and make it difficult for Moscow to sell its oil for a higher price.
The Treasury Department said the four entities that were designated for sanctions are United Arab Emirates-based Zeenit Supply and Trading, U.A.E.-based Talassa Shipping, NS Leader Shipping, and U.A.E.-based Oil Tankers SCF. All were involved in delivering Russian crude oil sold above the price cap last year, the department said.
The vessel that was blocked is the NS Leader, which made five port calls in Russia in 2023, according to the Treasury Department. Although NS Leader Shipping is the registered owner of ship, its ultimate owner is the Russian government, it said.
The sanctions freeze any assets held by the entities in U.S. jurisdiction and effectively bar anyone in the United States from dealing with the entities.
The determination prohibiting the importation of certain categories of diamonds mined in Russia affects nonindustrial diamonds mined or extracted in Russia, not including those that have been substantially transformed in a third country. The prohibition, which is also designed to deprive Moscow of foreign revenues that can be used by its war machine, takes effect on March 1 and will expand on September 1 to include additional categories.
The second determination prohibits the importation of diamond jewelry and unsorted diamonds of Russian origin or exported from Russia. The prohibition takes effect on March 1.
“These prohibitions are intended to implement the December 2023 G7 commitments to impose phased restrictions on the importation of diamonds mined or extracted in Russia,” the Treasury Department said.