Treasury Issues Partial Ban on Transportation of Seaborne Russian Oil

Treasury issued "Preliminary Guidance on Implementation of a Maritime Services Policy and Related Price Exception for Seaborne Russian Oil."

Treasury stated that, as part of a coalition of countries including the G7 and the European Union, it would ban services relating to the maritime transportation of Russian Federation-origin crude oil and petroleum products. The ban on maritime transportation of crude oil will become effective on December 5, 2022 and the ban on maritime transportation of petroleum products on February 5, 2023. The ban does not apply to jurisdictions and actors that purchase such seaborne Russian oil at or below a price cap, which will be established by the coalition. Treasury stated that the policy will be implemented pursuant to a determination under EO 14071 ("Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression").

Treasury said that the purpose of the ban is to (i) maintain a supply of seaborne Russian oil in the global market, (ii) ease the pressure on energy prices to keep them lower and (iii) limit the potential revenue that the Russian Federation earns from oil given that its decision to invade Ukraine artificially drove up prices. Treasury said that the maritime services policy will not affect seaborne Russian oil acquired below the cap price, but importers and refiners will have to provide appropriate documentation and attestations to confirm that the oil was purchased at or below the price cap.

In its guidance, Treasury detailed the type of documentation and recordkeeping that will be required of parties involved in the supply chain of seaborne Russian oil. Additionally, Treasury said that OFAC will, at a later date, publish guidance concerning the price cap and how it will be published and updated. Treasury affirmed that the importation into the United States of Russian-origin crude oil, petroleum and petroleum fuels remains prohibited pursuant to EO 14066 ("Prohibiting Certain Imports and New Investments With Respect to Continued Russian Federation Efforts To Undermine the Sovereignty and Territorial Integrity of Ukraine").