U.S. and Allies Pressure Countries Over Russian Oil Sanctions
Exclusive Pressure on Liberia, Marshall Islands, and Panama
The U.S., EU, and UK are pressuring Liberia, the Marshall Islands, and Panama to increase oversight of ships carrying their flags. This is 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.
Escalation in Efforts to Enforce Price Cap
The move marks another escalation in the West’s efforts to enforce the $60 price cap on seaborne shipments of Russian oil. The cap was imposed to punish Moscow for its war in Ukraine and has only recently been enforced.
Impact of the Price Cap
The cap aims to reduce Russia’s export revenues while maintaining flows of oil around the world. It bans Western companies from providing maritime services that facilitate the trade of Russian oil sold above the cap.
Challenges Faced by Russia
Russia has increasingly had to turn to a so-called “ghost fleet” of aging tankers to ship oil and avoid the cap. This has led to increased shipping costs and challenges in reaching countries like China and India.
Concerns about Flag Hopping
Panama, the Republic of the Marshall Islands, and Liberia have allowed some of those ships to carry their flags, a practice known as “flag hopping,” which allows some shell companies to sail with ships under those flags and dodge sanctions.
Increased Warnings to Countries
The letters warn the three countries of increased circumvention of the G7’s price cap on Russian oil. The goal is to tighten compliance on the cap and make it more expensive for Russia to move oil without using Western shipping services.
Leaders Signing the Letters
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, according to the source.
Requests for Comment
Embassies in Washington for the three countries did not immediately respond to requests for comment. The U.S. Treasury, the British embassy in Washington, and the Delegation of the EU to the U.S. also did not immediately respond to requests for comment.
Impact on Panama
Panama has traditionally been responsive to U.S. requests to deal with illicit activity, according to the source.
