WASHINGTON (Pakistan Point News / Sputnik - 23rd November, 2022) The price cap to be imposed on Russian oil will not be applied to crude that is "significantly transformed" outside of Russia, the US Treasury Department announced.
"If, however, after clearing customs, the Russian oil is taken back out on the water (i.e., using maritime transport) without being substantially transformed outside of the Russian Federation, the price cap still applies," the Treasury Department said on Tuesday. "This means any covered services, as listed in the determination, can only be provided by US service providers if such Russian oil is sold at or below the relevant price cap."
Once crude oil is substantially transformed in a jurisdiction other than Russia, it will not be considered to be of Russian origin and so the price cap would no longer be applied, the Treasury Deparment said.
"Thus, a refiner in a jurisdiction that has not banned the import of Russian oil can purchase crude oil at or below the price cap and rely on US service providers for services related to the maritime transport of that crude oil," it said. "In addition, such a refiner can subsequently refine the crude oil and then export the refined oil via marine transport, including with the use of US service providers, without that refined oil being subject to the price cap. OFAC does not consider blending of crude oil alone to be substantial transformation for the purpose of the determination."
