Home Health Care US offers new details on plan to cap Russian oil prices – EURACTIV.com

US offers new details on plan to cap Russian oil prices – EURACTIV.com

by Universalwellnesssystems

New guidance issued by the US Treasury Department adds more detail to the complex plan by the European Union, G7 countries and Australia to cap Russia’s oil prices starting December 5.

A price cap plan aimed at robbing Moscow of war profit premiums on oil has for months confused transport service providers about the specific rules they must comply with to avoid sanctions.

New guidance from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) answers some key questions, including when the restrictions will take effect and what scenarios and companies will be bound by them.

Importantly, however, this guidance does not yet indicate what the price cap will be. However, the guidance clarifies that the cap is on a freight-on-load (FOB) basis. That is, shipping, freight, customs clearance and insurance costs are not included.

Key points from the latest guidance include:

start and stop

“Transportation and insurance are covered by the service, but these costs are different from the Russian oil price cap,” the guidance said.

According to OFAC, oil cargoes loaded before 12:01 AM EST (0501 GMT) on December 5 and docked before January 12 are exempt from the price cap policy. This provides a grace period for cargo purchased over the cap before December 5th to reach its destination, often on long voyages.

However, oil purchased or docked after these times must adhere to the price cap.

In addition, the price cap applies only to the first “landing” sale outside Russia, i.e. the first point at which the cargo lands. If the oil is then resold onshore, it can be sold over the cap.

However, the guidance clarifies that if the cargo lands outside Russia and returns to sea without undergoing any substantial conversion, such as being refined into fuel, then the cap price will revert.

OFAC cites Kazakhstan’s oil exports via the Black Sea terminal of the Caspian Pipeline Consortium (CPC) as being certified as originating in another country, but oil unloaded via Russia is subject to the cap. Said it was out of scope.

Imports from Russia still banned in the US

The new guidelines will not allow U.S. companies to import Russian oil, OFAC said, stressing that the U.S. ban imposed in March following Russia’s invasion of Ukraine is still in effect.

However, the guidance notes that U.S. trading companies may be involved in sales to other destinations as long as they comply with price cap rules.

In a move to reassure some players in the global shipping industry, the guidance further outlined which types of companies would be required to participate in the cap plan. They include trade and commodity brokers, and companies involved in finance, shipping, insurance, flagging, and customs brokerage.

More tangential participants, such as providing insurance only for the crew and their medical care, or for inspection and piloting of oil tankers, are not covered by the policy.

Shippers were concerned that pilots would be subject to restrictions. This can increase the chances of accidents in tricky waterways.

You may also like

Leave a Comment

The US Global Health Company is a United States based holistic wellness & lifestyle company, specializing in Financial, Emotional, & Physical Health.  

Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!

Copyright ©️ All rights reserved. | US Global Health