OFAC / Russia Oil Price Cap, G/Ls, FAQ Updates

Department of the Treasury’s Office of Foreign Assets Control (OFAC) is taking its first oil price cap enforcement action of 2024, targeting a shipping company linked to a price cap violation.

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

The Price Cap

The United States is part of an international coalition of countries (the Price Cap Coalition), including the G7, the European Union, and Australia, that have committed to prohibit the import of crude oil and petroleum products of Russian Federation origin as well as to restrict a broad range of services related to the maritime transport of crude oil and petroleum products of Russian Federation origin—unless that Russian oil is bought and sold at or below the specific price caps established by the Coalition or is authorized by a license.

On December 20, 2023, OFAC, in coordination with the Coalition, updated its Guidance on Implementation of the Price Cap Policy for Crude Oil and Petroleum Products of Russian Federation Origin, to strengthen the attestation and recordkeeping processes for certain covered service providers and reduce opportunities for bad actors to disguise Russian oil purchased above the cap.

United Arab Emirates-based shipping company Hennesea Holdings Limited  is the ultimate owner of 18 vessels, including the HS Atlantica, which OFAC previously identified as having engaged in the transport of crude oil of Russian Federation origin priced above the $60 per barrel price cap while using a covered U.S.-based provider after the price cap policy came into effect. On December 1, 2023, OFAC identified the HS Atlantica as property in which Hennesea’s subsidiary, U.S.-designated HS Atlantica Limited, has an interest. Today, OFAC is additionally re-identifying the HS Atlantica as property in which Hennesea has an interest.

Shortly before the price cap went into effect, Hennesea, which was established in late 2022, acquired older tankers that ship Russian crude oil and petroleum products. Tankers ultimately owned by Hennesea have repeatedly conducted port calls in Russian Federation ports.

The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 13H, "Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024," and Russia-related General License 86, "Authorizing Limited Safety and Environmental Transactions Involving Certain Persons or Vessels Blocked on January 18, 2024." OFAC is also amending Frequently Asked Question 1157.