In June 2022, the Group of Seven (“G7”) countries—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States—decided to pursue a policy to cap the price of Russian oil. In December 2022, the G7 countries, joined by Australia and the supranational European Union (together, the “Price Cap Coalition”) officially implemented measures to ban a range of services related to the maritime transport of Russian-origin crude oil wherever the price being paid for that oil was above a capped threshold. The intent of the price cap was to keep Russian oil flowing to world markets, since it is vital to the global economy, while simultaneously reducing the revenues going to Russia and, therefore, Russia’s ability to sustain its actions in Ukraine. The Price Cap Coalition implemented similar measures for petroleum products in February 2023.

Over the past year, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) has ramped up its enforcement of the price cap by sending information requests to marine industry actors and imposing sanctions on entities implicated in transporting Russian crude oil being sold above the price cap. The Price Cap Coalition has expressly supported OFAC’s actions, including in an October 2023 statement noting that “Russian oil tax revenue was down 45%” and confirming the focus “on supporting compliance and enforcement.”[1]

The Price Cap Coalition, including the U.S. government, also has continuously published guidance to promote compliance with the price cap. For example, in conjunction with the October 2023 statement, the Price Cap Coalition released an advisory for the maritime oil industry and related sectors, outlining risks in the maritime oil trade and proposing recommendations as best practices.[2] OFAC also recently updated its guidance on the implementation of the price cap policy, setting out new expectations for maritime transport service providers.[3]

In this first article, we focus on OFAC’s recent enforcement activities and its guidance on compliance requirements.

The Price Cap Explained

On November 21, 2022, OFAC issued a determination pursuant to Executive Order 14071 implementing the price cap policy for Russia-origin crude oil.[4] OFAC issued a similar determination on February 3, 2023 for Russia-origin petroleum products.[5]

The determinations prohibit “the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by United States Persons, wherever located, of any of the Covered Services to any person located in the Russian Federation.” “United States (or U.S.) Persons” refers collectively to U.S. citizens and permanent residents, U.S. companies (including foreign branches), and anyone in the U.S. (which generally includes U.S. branches of foreign entities, as well as any individuals who are physically in the U.S.). The “Covered Services” include trading/commodities brokering, financing, shipping, insurance, flagging, and customs brokering as they relate to the maritime transport of Russian crude oil and petroleum products.

The determinations authorized the provision of these Covered Services when the price of the underlying crude oil or petroleum products does not exceed the relevant price cap. The U.S. Department of the Treasury subsequently issued additional determinations setting out the relevant price caps as agreed by the Price Cap Coalition, which remain in effect at the time of this article. The price cap on crude oil is USD 60 per barrel;[6] the price cap on Discount to Crude petroleum products is USD 45 per barrel;[7] and the price cap on Premium to Crude petroleum products is USD 100 per barrel.[8]

OFAC’s Recent Enforcement Activities Related to the Price Cap

Since October 2023, OFAC has imposed sanctions related to the price cap on more than 10 entities based in Liberia, Hong Kong, and the United Arab Emirates (“UAE”).[9] These entities include the owners of ships that have transported Russian crude oil above the price cap, a ship manager owned by the Russian government, and active “under-the-radar” traders of Russian oil with opaque ownership structures. OFAC also identified the relevant vessels as blocked property.

In all cases, OFAC imposed sanctions pursuant to Executive Order 14024, which broadly authorizes OFAC to designate persons operating in the marine sector of the Russian economy and persons owned by the Russian government. OFAC prohibits U.S. Persons from taking part in most transactions with designated persons (Specially Designated Nationals And Blocked Persons, or “SDNs”), while obliging all U.S. Persons to block any property or interests in property belonging to SDNs that come into their possession or control. U.S. Persons face both civil and criminal penalties for violating this prohibition/obligation.

The recent sanctions send a strong message to the marine transport sector that OFAC is actively scrutinizing all shipping-related intelligence and monitoring for indicia of price cap violations. Indeed, at the end of 2023, OFAC sent notices to ship management companies located in about 30 countries, requesting information on 100 vessels that it suspected of violating the price cap.[10] That followed prior OFAC warnings to U.S. service providers of sanctions evasive practices, in particular involving oil exports through the Eastern Siberia Pacific Ocean pipeline and ports on Russia’s eastern coast.[11] According to OFAC, it is aware of non-U.S. companies using a suite of deceptive practices to obtain Covered Services from U.S. Persons, such as:

  • Providing incomplete or false documentation to obscure true sale/purchase prices;
  • Providing bundled pricing that amalgamates the prices of oil and/or petroleum products with ancillary costs such as shipping, freight, customs, and insurance to obscure true sale/purchase prices; and/or
  • Manipulating the Automatic Identification System (“AIS”), which is vessel tracking technology, to obscure ship-to-ship transfers or true ports of calling, in a practice known as “spoofing.”

Additional Considerations

In our second article on this topic, we will consider recent OFAC guidance that created a safe harbor process whereby U.S. service providers may rely upon a “good faith” recordkeeping and attestation process to avoid strict liability for inadvertent sanctions violations, as well as an advisory published by the Price Cap Coalition highlighting several compliance and due diligence recommendations for the maritime oil industry designed to promote adherence with the price cap’s restrictive measures.

Please stay tuned.

[1]Statement of the G7 and Australia on Actions Taken to Enforce Price Caps for Seaborne Russian-Origin Oil and Petroleum Products” (October 12, 2023),

[2] Price Cap Coalition, “Advisory for the Maritime Oil Industry and Related Sectors Best Practices in Response to Recent Developments in the Maritime Oil Trade” (October 12, 2023),

[3] OFAC, “OFAC Guidance on Implementation of the Price Cap policy for Crude Oil and Petroleum Products of Russian Federation Origin” (issued on February 3, 2023, and revised December 30, 2023),

[4] OFAC, “Prohibitions on Certain Services as they Relate to the Maritime Transport of Crude Oil of Russian Federation Origin” (November 21, 2022),

[5] OFAC, “Prohibitions on Certain Services as they Relate to the Maritime Transport of Petroleum Products of Russian Federation Origin, November” (February 3, 2023),

[6] U.S. Department of the Treasury, “Determination Pursuant to Sections 1(a)(ii), 1(b), and 5 of Executive Order 14071 Price Cap on Crude Oil of Russian Federation Origin,

[7] U.S. Department of the Treasury, “Determination Pursuant to Sections 1(a)(ii), 1(b), and 5 of Executive Order 14071 Price Cap on petroleum products of Russian Federation Origin,

[8] Ibid.

[9] U.S. Department of the Treasury, “Treasury Sanctions Entities for Transport Oil Sold Above the Coalition Price Cap to Restrict Russia’s War Machine” (October 12, 2023),; US Department of the Treasury, “Treasury Sanctions Additional Maritime Companies, Vessels Transporting Oil Sold Above the Coalition Price Cap” (November 16, 2023),; U.S. Department of the Treasury, “Treasury Imposes Additional Price Cap-Related Sanctions” (December 1,2023),; and U.S. Department of the Treasury, “Treasury Tightens the Price Cap with New Sanctions and Updated Guidance” (December 20, 2023),

[10] Reuters, “US probes 30 ship managers for suspected Russia oil sanctions violations” (November 13, 2023),

[11] OFAC, “Alert on Possible Evasion of the Russian Oil Price Cap” (April 17, 2023),