U.S. Takes First Oil Price Cap Enforcement Action Of 2024

The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) has taken its first oil price cap enforcement action of the year, according to a Thursday press release.

The enforcement action is against UAE-based shipping company Hennesea Holdings Limited (Hennesea) linked to a price cap violation. Hennesea is the ultimate owner of 18 vessels—all crude oil and chemical tankers—including the HS Atlantica, which OFAC has identified as having carried Russian crude oil that had been purchased above the $60 threshold—while being covered by a U.S.-based provider.

OFAC has alleged that Hennesea tankers have repeatedly conducted port calls in Russian Federation ports.

“Today’s actions once again demonstrate that anyone who violates the price cap will face the consequences,” Deputy Secretary of the Treasury Wally Adeyemo said. “No one should doubt our coalition’s commitment to stopping those who help the Kremlin.”

A month ago, OFAC updated its guidance on the implementation of its crude oil price cap policy of Russian Federation origin “to reduce opportunities for bad actors to disguise Russian oil purchased above the cap.”

Today’s actions designate all property and interests in property of Hennesea that are in the U.S. or in the possession or control of US persons as blocked, and must be reported to OFAC. Any entities that are owned directly or indirectly by 50% or more by Hennesea are also blocked. All transactions by U.S. persons or within the U.S. that involve any blocked property are prohibited unless exempt.

The United States, the G7, the EU, and Australia have all agreed to prohibit the importation of crude oil and crude oil products originating from Russia unless the oil is purchased and sold below the designation price cap as specified by the coalition.

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