Russian tanker transport targeted due to Ukraine invasion
The Treasury Department on Tuesday issued new guidance on shipping policies for Russian oil ahead of a price cap expected in early December.
The guidelines, which complement policies recently released by the UK, outline how US service providers can continue to transport Russian maritime oil that was loaded before December 5, while respecting a strategic price cap for this oil. designed by the G7 countries, the EU and Australia.
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This so-called Price Gap Coalition aims to deprive Russia of a source of funding to continue its war against Ukraine.
A senior Treasury official told reporters on Tuesday that the department expects other coalition countries to issue similar guidance in the coming days to implement the price gap policy.
“We are taking these steps to allow market participants to implement the price cap policy as easily as possible from December 5, in line with the coalition’s objectives of allowing the Russians to maintain the flow of foreign oil while by reducing Kremlin revenue,” the official said.
Maritime transport and customs brokerage are among several services covered by a decree relating to the transport of Russian oil by sea.
The guidelines state that service providers will not be financially penalized for transporting crude oil of Russian origin loaded and shipped before 12:01 a.m. ET on December 5 and unloaded at the port of destination before 12:01 a.m. ET on January 19. .
The guidelines also outline a law enforcement “safe harbor” for suppliers who follow a process of maintaining records and certifying that oil was purchased at or below the ceiling price.
Imports of Russian oil are banned into the United States under the policy, which will take effect on December 5.
Treasury officials said they have already seen evidence of product being redirected from US and European markets, which are no longer in the Russian oil market.
“I think at last count, less than 90,000 barrels of oil were still going to Europe at this point,” an official said.
Russian oil production is expected to fall to 1.4 million barrels per day by next year.
The Price Cap Coalition has not yet decided how much to cap the price of oil, but the cap will be set after a “technical exercise” conducted by the coalition, according to the guidelines.
The decision will be made “in the next few days”, said a senior Treasury official.