US sanctions traders of Russian oil as it tightens price cap

The US took some of its strongest steps yet to enforce a price cap on Russian oil, targeting for the first time crude traders and a state-backed shipping giant as it seeks to pressure Moscow over its invasion of Ukraine. 

The US Treasury Department announced the steps Wednesday, including sanctions on Bellatrix Energy Ltd., a Hong Kong-based firm among the shadowy traders that emerged to help Russia keep its oil exports flowing. Essentially unheard of before the war, it has handled about 20% of shipments during the first nine-months of this year from the country’s third-largest exporter, Surgutneftegas PJSC.

Deputy Treasury Secretary Wally Adeyemo said Wednesday that the sanctions show that anyone trading or transporting Russian oil by sea should comply with the cap or “face the consequences.” 

The US in recent weeks has sought to ramp up enforcement of the year-old price cap it imposed with allies on Russia’s oil. Earlier Wednesday, a senior treasury official said the second phase of the effort was going to include a harder push to enforce the policy, including attempts to accelerate the costs for those operating outside of it. 

Also targeted was Covart Energy Ltd., also Hong Kong-based, as well as Voliton DMCC, in the United Arab Emirates. Voliton — previously known as Petrokim Trading Middle East and Asia DMCC — has “sharply increased” its trading of Russian oil since the price cap went into effect, Treasury said.

Sanctions were also placed on UAE-based SUN Ship Management D Ltd., a company owned by Russia’s state-backed shipping company Sovcomflot PJSC and manages its ships. As of Friday it had control over 24 vessels, according to shipping database Equasis. Among those, SUN manages the SCF Primorye, which had previously been sanctioned by the US for price cap violations.

Treasury has previously rolled out three rounds of sanctions since October, targeting ships and their owners accused of breaching the cap.