February 13, 2024 [Oil Price]- Tougher sanction enforcement by the United States has put a sizeable part of the tanker fleet used to carry Russian crude abroad out of commission.
Per a Bloomberg report, half of the 50 tankers that the U.S. Department of Treasury slammed with sanction violation penalties have not loaded cargos since October, when the list of these tankers was released.
The publication noted, however, that this might not be the complete picture because the sanction violation penalties are being issued in batches and will not affect all vessels on the list simultaneously.
Indeed, Bloomberg reported that of the 50 tankers listed by the Department of Treasury in October last year, 18 have loaded cargos since then. Of them, nine were shuttle tankers and the rest were doing regular trips despite their addition to the list. Of the other 31, seven were idled before the Treasury’s list publication and three were due to load a cargo soon, Bloomberg said.
“Independent agencies, market analysts and the Russians themselves point to the fact that the price cap is achieving both of our goals: denying Russia the energy profits it needs to wage its illegal war, while simultaneously promoting stable energy markets,” said Eric Van Nostrand, Treasury’s acting Assistant Secretary for Economic Policy.
The U.S. and its partners in the G7 group imposed a price cap on Russian oil in 2022, aiming to reduce the state’s revenues from oil exports while avoiding a shortage of crude. The cap was set at $60 per barrel and Russia promptly said at the time it will not be selling at capped prices.
As the market would have it, Russia’s flagship Urals blend traded below the price cap for much of the year and into 2023, which made both sides claim a victory. Then oil prices rose, and so did Russian oil prices, with a lot of crude selling well over the price cap.
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