US sanctions Russian shipping giant in bid to squeeze oil sales

The US imposed sanctions on Russian oil-shipping giant Sovcomflot PJSC, joining the UK and other allies in a fresh bid to clamp down on President Vladimir Putin’s efforts to evade a price cap on crude exports.

The Treasury Department also sanctioned 14 crude oil tankers identified as being linked to the company, Treasury said in a statement. The company had already been sanctioned by Australia, Canada, New Zealand and the UK, and faced European Union restrictions. The US had previously sanctioned companies linked to the shipper.

Among other measures imposed on Russia following the February 2022 invasion of Ukraine, the US and its allies slapped an oil-price sales cap on the country’s exports. After losing effectiveness in the summer and fall, Treasury officials believe the cap is working better now following several rounds of enforcement actions.

The sanctions against Sovcomflot are for “operating or having operated in the marine sector of the Russian Federation economy,” Treasury said.

Sanctions on Russian oil have cut into the Kremlin’s coffers, with a 12% drop in month revenues, according to the Centre for Research on Energy and Clean Air.

The announcement after the market close on Friday came hours after the US announced its biggest single-day package of Russia sanctions since the invasion of Ukraine two years ago. More than 500 individuals and entities around the world were punished in that action.

The Treasury department released an analysis Friday touting the success of the new enforcement measures. Still, with much of the Russian oil still flowing onto the market and being snapped up by India and China, Moscow is able to get the money it needs to purchase goods and services necessary to keep its war machine humming.