The United States on December 20 issued new Russia-related sanctions against entities in Hong Kong and the United Arab Emirates that the Treasury Department said have transported Russian crude oil sold above a price cap set last year by Group of Seven (G7) countries.
The department designated what it called "under the radar" traders of Russian oil and a company that is based in the United Arab Emirates but owned by a fleet operator owned by the Russian government.
The Treasury Department said in a news release that the businesses have emerged as "frequent participants in the seaborne transportation of Russian-origin oil" since the price cap was imposed.
The department said that these "little-known oil traders with opaque ownership structures" have emerged and are shipping up to half of Russia's oil exports.
Three companies designated by the United States for sanctions -- Hong Kong-based Bellatrix Energy, Hong Kong-based Covart Energy, and U.A.E.-based Voliton DMCC -- sharply increased their share of trade in Russian oil since the price-cap policy was implemented, the department said.
The department's Office of Foreign Assets Control (OFAC) said it also designated U.A.E.-based SUN Ship Management, which is owned by fleet operator Joint Stock Company Sovcomflot (SCF), a company owned by the Russian government.
The Treasury Department said SUN Ship manages the SCF Primorye, a vessel OFAC previously identified as having engaged in the transport of Russian crude oil priced above $60 per barrel after the price cap came into effect in December 2022.
The sanctions freeze all property and interests owned by the entities in U.S. jurisdiction and prohibit people in the United States from dealing with the companies.
The Treasury Department said in a separate statement that the price-cap coalition led by the United States had updated its compliance regime.
The price cap on Russian seaborne crude oil last year replaced an outright ban on buying Russian seaborne crude implemented to reduce Moscow's ability to finance its war in Ukraine.
The price cap works by prohibiting shippers, 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 G7 countries, giving them leverage to set the price cap and make it difficult for Moscow to sell its oil for a higher price.
The Price Cap Coalition Advisory for the Maritime Oil Industry and Related Sectors recommended in October that industry stakeholders conduct increased diligence when dealing with intermediary companies, such as traders, that conceal their ownership or otherwise engage in unusually opaque practices.
The coalition emphasized as it issued the new compliance rules that "due diligence is especially important where market assessments indicate that Russian oil prices exceed the price cap, and Price Cap Coalition services are being used or sought."
The Price Cap Coalition includes the G7, the European Union, and Australia, which all agreed to prohibit the import of crude oil and petroleum products from Russia under terms of the price-cap agreement, which intends to maintain a stable global market while reducing the revenues Russia earns from oil.