The UK Government has introduced new legislation to prevent countries from using its services to transport Russian oil.
Britain’s ships and services that facilitate the maritime transport of Russian crude oil will be banned from 5th December 2022 unless it is purchased at or below the oil price cap set by the Price Cap Coalition of the G7 and Australia.
The ban on services, including insurance, brokerage and shipping, will be coupled with a General Licence that lays the basis for an Oil Price Cap exception that will allow third countries to continue accessing services only if buying Russian oil at or below the cap.
The Treasury has set up a new team, based in the Office of Financial Sanctions Implementation, to enforce the scheme.
The team will set up the licensing and enforcement system for the Oil Price Cap, engage with industry to ensure readiness for the cap and monitor the level and impact of the cap on an ongoing basis.
The move follows the decision made by the G7 finance ministers in September, who committed to the price cap as a way of undermining Putin’s ability to fund his war in Ukraine through inflated global oil prices, while ensuring third countries can continue to secure affordable oil.
The UK and its coalition partners will not make use of the cap as they have introduced an import ban on Russian oil.
Chancellor Jeremy Hunt said: “We continue to stand by Ukraine in the face of Putin’s barbaric and illegal invasion. We’ve banned the import of Russian oil into the UK and are making good progress on phasing it out completely. This new measure continues to turn the screws on Putin’s war machine, making it even tougher for him to profiteer from his illegal war.”