The United States imposed sanctions on two owners of tankers that carried Russian oil above the G7 price cap of $60 a barrel, one based in Turkey and one based in the United Arab Emirates, the U.S. Treasury Department said on Thursday.

The United States, other G7 countries and Australia imposed the cap last year, seeking to reduce Russia’s revenues from seaborne oil exports as part of sanctions for its invasion of Ukraine.

The cap bans Western companies from providing maritime services including insurance, finance and shipping for Russian seaborne oil exports sold above $60 a barrel, while seeking to keep oil flowing to markets. Caps also were imposed on two oil products.

President Joe Biden’s administration placed sanctions on Turkey-based Ice Pearl Navigation SA, owner of the Yasa Golden Bosphorus, which the Treasury said carried Russian ESPO crude priced above $80 a barrel after the cap took effect in December last year.

The United States also imposed sanctions on UAE-based Lumber Marine SA, owner of the SCF Primoyre, which the Treasury said was carrying Novy Port Russian crude above $75 per barrel.

Both tankers, which conducted port calls in Russia, used U.S.-based service providers while transporting the Russian origin oil, the Treasury said.

“Because of the actions we’re announcing today, and the further actions we will take in the coming weeks and months, these costs will continue to rise and Russia’s ability to sustain its barbaric war will continue to weaken,” a senior Treasury official, speaking on condition of anonymity, told reporters in a call.

Global oil prices have risen to around $85 a barrel in recent months on production cuts and thin world spare production capacity. That has helped to limit the efficacy of the cap, but actions to toughen enforcement will make it more effective, according to people who advised the Treasury.

The International Energy Agency (IEA) said on Thursday that preliminary estimates showed Russian crude oil exports last month stood at 4.9 million bpd, down about 100,000 bpd from the May-June average. But it also said Russia’s total exports of crude oil and products in September rose by 460,000 bpd to 7.6 million bpd, with crude accounting for 250,000 bpd of the increase.

The cap has forced Russia to invest in a “ghost fleet” of old tankers vulnerable to leaks and oil spills and turn to buyers in China and India, which are thousands of miles (km) more distant than traditional consumers in Europe.

The U.S. Treasury official said the cap forces Russia to pay about $36 a barrel for those non-Western maritime services, expenses that go to “tankers not tanks” reducing its revenues for use in the Ukraine war.

Source: Reuters