Page 113 - ΝΑΥΤΙΚΑ ΧΡΟΝΙΚΑ - ΜΑΙΟΣ 2024

of Treasury, Russia’s oil tax revenue dropped over
40% in the first nine months of 2023 compared
to the corresponding period in 2022. In fact, Rus-
sian oil began trading at a lower price than Brent,
the global benchmark for crude oil prices. Unfor-
tunately, the emergence of the “shadow” or “dark
fleet” allowed Russian oil to be traded above the
2
price cap. The carriage of oil is a complex process,
and the costs associated with such carriage make
it quite challenging for financial services to know
with any degree of certainty whether a shipment
of oil has actually been sold below the price cap.
In addition to oil being traded through the shadow
fleet, excessive ancillary costs are being reported
in many instances despite the lack of documentary
evidence.
As a result of the efforts to evade the price cap pol-
icy, in late 2023, the Coalition launched the second
phase of the price cap in the hope of accomplish-
ing two goals: tightening compliance and enforce-
ment to restrict the evasion of the price cap policy
by malicious market participants and increasing
Russia’s cost of selling its oil via the “shadow fleet”.
Since the implementation of the second phase
of the price cap, the US Department of Treas-
ury’s Office of Foreign Assets Control (OFAC) has
imposed sanctions and designated vessels and their
owners, shipping companies, and oil traders that
used Coalition services to trade Russian oil above
the cap. In one instance, OFAC, along with the US US, UK, and the EU all engaging in designations of 1. A special thanks
Department of State, designated a tanker owner in bad actors and their vessels. Nevertheless, whether to my colleague,
the United Arab Emirates and another one in Turkey these actions will result in limiting Russia’s revenue Jasmine Roberts,
for her invaluable
to carry Russian-origin oil at prices exceeding the and ultimately forcing them to cease hostilities in assistance and
price cap (i.e., $75 and $80, respectively). OFAC Ukraine is anyone’s guess. insight.
also designated a United Arab Emirates-based The landscape of shipping sanctions continues 2. Much debate exists
shipping company, along with its 18 vessels. As to evolve amidst geopolitical tensions, regulatory around an accurate
a result of these designations, all property and changes, and technological advancements. Recent definition of
the “dark fleet”.
interests owned by the blocked persons within the developments emphasise the importance of robust For the purposes
United States or under the possession or control enforcement processes, international cooperation, of this article
of the United States are now frozen and must be and innovative solutions to effectively address chal- only, the “dark
fleet” can be
reported to OFAC. lenges in the maritime sphere. As governments characterised as
Moreover, OFAC, in coordination with the Coalition, seek to uphold sanctions regimes, combat illicit vessels (mostly
updated its “Guidance on Implementation of the activities, and promote maritime security, stake- older ones) not
carrying Western
Price Cap Policy for Crude Oil and Petroleum Prod- holders in the shipping industry must remain vig- insurance that
ucts of Russian Federation Origin” to strengthen ilant and adaptable to navigate the dynamic reg- are anonymously
the attestation and record-keeping processes. ulatory environment. The need for enhanced due owned and/or have
opaque corporate
Similarly, the European Union has sanctioned over diligence and compliance deep dives has never structures, solely
2,000 individuals and entities since the invasion of been as critical as in today’s shipping arena. Gone employed to trade
Ukraine. The United Kingdom’s Office of Financial are the days when an owner or charterer accepted sanctioned oil, and
engage in deceptive
Sanctions Implementation (OFSI) has also desig- a fixture simply because it made economic sense shipping practices.
nated hundreds of individuals and entities. without investigating the background of the parties
Since the launch of the second phase of the involved. From owners to charterers, managers to
price cap, the discount on Russian-origin oil has suppliers, sustained efforts in monitoring, com-
increased from “a low of $12 to $13 a barrel of crude pliance, and dialogue are essential to promoting a
oil to about $19 per barrel”, according to OFAC. The more transparent, secure, and sustainable shipping
implementation of the price cap regulations has, for industry in the face of evolving geopolitical and eco-
once, led to a unified enforcement front, with the nomic realities.

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