© Reuters. FILE PHOTO: Russian flag with inventory graph and an oil pump jack miniature mannequin are seen on this illustration taken October 9, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
By Timothy Gardner
WASHINGTON (Reuters) – The U.S., EU and UK are pressuring Liberia, the Marshall Islands and Panama to extend oversight of ships carrying their flags to make sure they don’t transport Russian oil bought above the worth cap, a supply who has seen the communications to the nations stated on Friday.
The transfer marks one other escalation within the West’s efforts to implement the $60 value cap on seaborne shipments of Russian oil it imposed to punish Moscow for its warfare in Ukraine.
The cap, which goals to scale back Russia’s export revenues whereas sustaining flows of oil world wide, was imposed in late 2022 however has solely just lately been enforced.
The mechanism bans Western firms from offering maritime companies corresponding to transportation, insurance coverage and finance that facilitate the commerce of Russian oil bought above the cap.
Russia has more and more needed to flip to a so-called “ghost fleet” of growing old tankers to ship oil and keep away from the cap. That fleet is transporting oil to nations together with China and India, a lot additional away than Russia’s conventional buyer base and including significantly to delivery prices.
Panama, the Republic of the Marshall Islands, and Liberia have allowed a few of these ships to hold their flags, based on Lloyd’s List Intelligence and oil analysts. The apply, often known as “flag hopping,” permits some shell firms which have been set as much as commerce Russian oil to sail with ships underneath these flags and dodge sanctions.
Lloyd’s List Intelligence has stated almost 40% of the about 535 dark-fleet tankers have registered possession by way of firms integrated within the Marshall Islands.
The letters warn the three nations of elevated circumvention of the G7’s value cap on Russian oil and of the excessive degree of danger connected to vessels that don’t carry Western insurance coverage and different companies and which can be in search of different flags, the supply stated. The three nations themselves usually are not prone to Russian sanctions.
Embassies in Washington for the three nations didn’t instantly reply to requests for remark.
The objective of the stress is to not cut back the variety of ships carrying Russian oil on the water, however to tighten compliance on the cap and to make it dearer for Russia to maneuver oil with out utilizing Western delivery companies. It additionally seeks to provide leverage to nations shopping for oil exterior the price-cap coalition to get discounted oil from Russia.
Panama has historically been attentive to U.S. requests to take care of illicit exercise, the supply added.
The group is asking Liberia and the Marshall Islands to extend consciousness amongst these within the commerce that its flag shouldn’t be used for tankers transporting oil priced above the cap.
The letters have been signed by Lindsey Whyte, head of worldwide finance at Britain’s Treasury, John Berrigan, head of the European Commission’s monetary companies unit, and Brian Nelson, the highest terrorism financing official on the U.S. Treasury, the supply stated.
Reuters has not seen the letters in query. The U.S. Treasury, the British embassy in Washington and the Delegation of the EU to the U.S. didn’t instantly reply to requests for remark.
