The US Treasury has imposed sanctions on two companies for purchasing Russian oil above the designated price cap. Lumber Marine, based in the United Arab Emirates, bought oil priced above $75 per barrel, while Ice Pearl Navigation, a Turkish company, transported oil priced above $80 per barrel. The goal of these sanctions is to strictly enforce the price cap and further limit Russian oil profits, which would restrict the country’s financing of the war in Ukraine. The US Treasury has identified and blocked access to all property and interests owned by these companies in the US.
These companies relied on US-based services to transport the oil, and the sanctions aim to prevent companies from using Western providers for shipping, financing, or insurance if they exceed the price cap. However, US-based service providers will not face sanctions if they were misled by others in the shipping chain regarding the price of the oil. The US Assistant Secretary for Energy Resources, Geoffrey Pyatt, stated at a conference that Russia will no longer be viewed as a reliable energy supplier, and the US is committed to working with G7 partners to deny Russia future energy revenues.
Despite Western efforts to limit Russian revenue, the volume of Russian oil exports increased by 50% in Spring 2023, and the Kyiv School of Economics predicts that revenues are likely to rise due to global crude price increases. Russia has been utilizing alternative export routes to countries like China and India, which have not enforced a price cap. Therefore, there is a possibility that the predictions of increased revenues may come true.
