U.S., allies pressure Liberia, Marshall Islands, Panama over Russia oil
sanctions
Send a link to a friend
[December 02, 2023] By
Timothy Gardner
WASHINGTON (Reuters) - The U.S., EU and UK are pressuring Liberia, the
Marshall Islands and Panama to increase oversight of ships carrying
their flags to ensure they do not transport Russian oil sold above the
price cap, a source who has seen the communications to the countries
said on Friday.
The move marks another escalation in the West's efforts to enforce the
$60 price cap on seaborne shipments of Russian oil it imposed to punish
Moscow for its war in Ukraine.
The cap, which aims to reduce Russia's export revenues while maintaining
flows of oil around the world, was imposed in late 2022 but has only
recently been enforced.
The mechanism bans Western companies from providing maritime services
such as transportation, insurance and finance that facilitate the trade
of Russian oil sold above the cap.
Russia has increasingly had to turn to a so-called "ghost fleet" of
aging tankers to ship oil and avoid the cap. That fleet is transporting
oil to countries including China and India, much further away than
Russia's traditional customer base and adding greatly to shipping costs.
![](http://archives.lincolndailynews.com/2023/Dec/02/images/ads/current/peasley_sda_HFH_2023.png)
Panama, the Republic of the Marshall Islands, and Liberia have allowed
some of those ships to carry their flags, according to Lloyd's List
Intelligence and oil analysts. The practice, known as "flag hopping,"
allows some shell companies that have been set up to trade Russian oil
to sail with ships under those flags and dodge sanctions.
Lloyd's List Intelligence has said nearly 40% of the about 535
dark-fleet tankers have registered ownership via companies incorporated
in the Marshall Islands.
The letters warn the three countries of increased circumvention of the
G7's price cap on Russian oil and of the high level of risk attached to
vessels that do not carry Western insurance and other services and that
are seeking other flags, the source said. The three countries themselves
are not at risk of Russian sanctions.
[to top of second column] |
![](../images/120223PIX/busine51.jpg)
Russian flag with stock graph and an oil pump jack miniature model
are seen in this illustration taken October 9, 2023. REUTERS/Dado
Ruvic/Illustration/File Photo
![](http://archives.lincolndailynews.com/2015/May/02/images/ads/current/guzzardo_lda022609.png)
Embassies in Washington for the three countries did not immediately
respond to requests for comment.
The goal of the pressure is to not reduce the number of ships
carrying Russian oil on the water, but to tighten compliance on the
cap and to make it more expensive for Russia to move oil without
using Western shipping services. It also seeks to give leverage to
countries buying oil outside the price-cap coalition to get
discounted oil from Russia.
Panama has traditionally been responsive to U.S. requests to deal
with illicit activity, the source added.
The group is asking Liberia and the Marshall Islands to increase
awareness among those in the trade that its flag should not be used
for tankers transporting oil priced above the cap.
The letters were signed by Lindsey Whyte, head of international
finance at Britain's Treasury, John Berrigan, head of the European
Commission's financial services unit, and Brian Nelson, the top
terrorism financing official at the U.S. Treasury, the source said.
Reuters has not seen the letters in question. The U.S. Treasury, the
British embassy in Washington and the Delegation of the EU to the
U.S. did not immediately respond to requests for comment.
(Reporting by Timothy Gardner; Editing by Simon Webb and Rosalba
O'Brien)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
![](http://archives.lincolndailynews.com/2023/Dec/02/images/ads/current/humanesociety_sda022411.png) |