The Treasury Department issued recent guidance Tuesday about policies on the maritime transport of Russian oil ahead of a planned price cap in early December.
The guidance, which complements the U.K.’s newly-released policies, outlines how U.S. service providers can proceed carrying Russian seaborne oil that was loaded before Dec. 5, while complying with a strategic price cap on that oil devised by the G7 countries, the E.U. and Australia.
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That so-called Price Gap Coalition is aiming to deprive Russia of a funding source to proceed its war against Ukraine.
A senior Treasury official told reporters Tuesday that the department expects other coalition countries to release similar guidance in the approaching days with the intention to implement the worth gap policy.
“We’re taking these steps to make it as easy as possible for market participants to implement the worth cap policy as of Dec. 5 consistent with the coalition’s goals of allowing Russians to maintain foreign oil (in) flow while lowering the Kremlin’s revenues,” the official said.
Shipping and customs brokering are amongst several services covered under an executive order addressing the transport of Russian oil by sea.
The guidance says service providers won’t be financially penalized for the transport of crude oil of Russian origin loaded and shipped prior to 12:01 a.m. ET on Dec. 5 and unloaded on the destination port prior to 12:01 a.m. ET on Jan. 19.
The guidance also outlines a “secure harbor” from enforcement for providers who follow a recordkeeping and attestation process showing the oil was purchased at or below the worth cap.
Russian oil imports are banned from the U.S. under the policy, which takes effect Dec. 5.
Treasury officials said they’ve already seen evidence of the redirection of the product from U.S. and European markets, which are not any longer out there for Russian oil.
“I feel the last count lower than 90,000 barrels of oil were still going to Europe at this point,” an official said.
Russian oil output is predicted to fall to 1.4 million barrels a day by next 12 months.
The Price Cap Coalition has not yet selected how much to cap the worth of oil, however the cap can be set after a “technical exercise” conducted by the coalition, in line with the guidance.
The choice can be made “in the approaching days,” a senior Treasury official said.
