Details of the Russian oil price cap and penalties and bans against shipping companies who infringe sanctions due to come in place on December 5 are beginning to emerge.
The Group of Seven nations will soon announce the price cap on Russian oil exports with speculation that it will stand at $60 per barrel to begin with and then be adjusted regularly.
The US Treasury, meanwhile, yesterday issued a 12-page report detailing how American companies should operate after December 5 in terms of handling Russian oil.
A 45-day grace period is to be introduced, applying to oil loaded before December 5 and discharged by January 19.
However, any vessel “intentionally” carrying Russian crude oil or petroleum products will be prohibited from services for 90 days following discharges, if the price of oil has been purchased above the threshold.
In terms of implementation, the New York Times is reporting that it will be up to European shipping companies to ensure that the price of oil has been transacted at or below the capped price. Failing to do so will render them legally liable for violating sanctions.
“To many in the shipping industry, and the wider community, that raises a myriad of questions, now being discussed behind closed doors or openly debated in conference rooms around the world,” analysts at Lorenzten & Co observed in a daily markets briefing today.