Herbert Smith Freehills recently hosted a webinar to discuss the way in which the recent Russian oil price cap measures will operate across the UK, EU and US and to consider the potential challenges that may arise for companies wishing to deal in Russian oil and those who provide related services.
The introduction of the first limb of the G7 Russian oil price cap represents yet another novel element of the sanctions imposed on Russia in response to the invasion of Ukraine. Rather than imposing outright bans on dealings with Russian oil, in September of this year the G7 introduced a plan to impose a cap on the price importers pay for Russian oil with a view to shrinking a key source of revenue used by Russia to finance the war. The oil price cap measures therefore ban the provision of services related to the seaborne transportation of Russian origin oil and oil products, unless purchased at or below the so-called price cap, thereby impacting importers of oil based in third countries which have not imposed sanctions on Russia where those importers rely on insurance cover and shipping services from UK, EU and US companies.
The price cap measures introduced by the UK, EU and US in respect of crude oil came into force on 5 December, with equivalent measures for petroleum products to follow on 5 February 2023.
A recording of the webinar is available here for those who were not able to join.
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On 30 September, Foreign Secretary James Cleverly announced the imposition of a round of new UK sanctions against Russia. These restrictions are not yet in force.
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