US companies may be unknowingly helping Russia evade the oil price cap, Treasury warns

• Russia could be funneling crude to Asia above the $60 price cap, the US Treasury said on Monday.
• US companies could be unknowingly providing related services for sales above the cap.

Russia could be evading the $60-per-barrel price cap on its crude, and US firms may be unknowingly facilitating the trade, according to a statement from the US Treasury.

The Office of Foreign Assets Control within the Treasury Department acknowledged reports saying that Russian crude exported through the Eastern Siberia-Pacific Ocean pipeline to Asia may have been priced above the cap, with US companies being tricked into providing services.

"These US service providers may be unaware that they are providing covered services involving Russian oil purchased above the price cap, as the non-US persons involved in the exports may have provided incomplete or false documentation or used other deceptive practices," OFAC said in an alert on Monday.

Such practices could include "spoofing," the office said, which disguises the origin of an oil tanker by manipulating the ship's identifying system.

OFAC advised shipping and insurance firms to be mindful of the risk of price cap evasion, adding that firms could potentially detect ships with manipulated identities by using other available maritime records.

In December, Western nations imposed the price cap, which prevents Russia from accessing Western shipping and insurance services unless its oil is sold below the $60-per-barrel threshold. The cap was designed to crimp Russia's oil revenue amid its invasion of Ukraine but prevent a supply shock.

Russia has taken other measures to skirt the sanctions, such as by assembling a shadow fleet of over 100 oil tankers, and mislabeling some of its crude products, sources previously told Bloomberg.

And some estimates show that the price cap has been largely ineffective so far, with Russian crude being sold way above $60, researchers said.

Current rules make it so that the price cap is operated on an honors system, one US Treasury official previously said, with Western companies merely reporting that oil was sold below the price cap without submitting verifications to a registry.

Verifications could be as simple as asking Russian oil customers to promise in writing that they will adhere to the price cap, the Treasury official said. Another official added that there was no real way to enforce the price cap mechanism.