Explainer: What does US warning over Russian oil price cap mean?

The US Treasury has warned US companies of possible evasions of the Russian petroleum price cap of crude oil exported through the Eastern Siberia Pacific Ocean (ESPO) pipeline and ports in eastern Russia. The Office of Foreign Assets Control (OFAC) at the department said it is aware of reports that ESPO and other crude oils exported via Pacific ports, such as Kozmino, may be trading above the $60 price cap imposed on Russia by Western countries. The Group of Seven countries, including the United States, and the EU have placed the cap on Russian shipments of crude oil since late last year as part of sanctions on Russia following its February 2022 invasion of Ukraine.

OFAC said some tankers may be manipulating their automatic identification systems, a practice known as spoofing, to hide their calls at Kozmino or other ports. Spoofing can also mask ship-to-ship transfers to disguise the origin of Russian oil.

The office said ship owners and other service providers can use records and attestations by oil market players that Russian oil they service was purchased below the cap to avoid penalties. Individuals or companies who evade, avoid, or violate the price cap could be subject to penalties.