UK Price Caps on Russian Oil Takes Effect, OFSI Updates General Licenses
The U.K.'s prohibition on the maritime transport of refined oil products from Russia and the provision of related services came into force Feb. 5, along with $100 and $45 price cap exceptions for oil products traded at a premium to crude and at a discount to crude, respectively. The Office of Financial Sanctions Implementation concurrently issued an updated guidance on the ban and oil price cap, which covers an overview of the ban, compliance and enforcement, exceptions and licensing, attestation with example scenarios, reporting requirements, definitions and examples of where the ban will not apply.
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OFSI further amended the General License pertaining to the oil price cap, which allows the maritime transport of Russian crude oil and provision of related services where the oil is bought at or below $60 per barrel. The license was updated to include commodity code 2710 oil and oil products; set the price cap for "premium-to-crude" products, like diesel, at $100 per barrel; and set the price cap for "discount-to-crude" products, such as fuel oil, at $45 per barrel.
OFSI also issued a General License for the wind-down of refined oil products, which permits certain activities for commodity code 2710 Russian oil and oil products bought above the price caps, which were loaded before 12:01 a.m. EST Feb. 5 and will be unloaded before 12:01 a.m. EST April 1. The license allows for the supply or delivery of the goods by ship from Russia to a third country or between countries; the provision of relevant services; and relevant institutions to process payments related to the covered activities.