- A new U.S. bill would create a $150 million fund to enforce sanctions on Russia’s “ghost fleet” of oil tankers.
- The bill calls for a DHS-led center to coordinate action against illegal oil trade.
- Confiscated oil could be sold to help reduce the U.S. federal debt.
Two U.S. Senators, both from the Democratic and Republican parties, introduced legislation that establishes a Fund to enforce sanctions against Russia’s so-called “ghost fleet” of oil tankers it relies on in order to avoid Western sanctions due to its war with Ukraine, reports Reuters.
The bill, introduced by Senators Joni Ernest, a Republican and Richard Blumenthal a Democrat creates a special fund for enforcing sanctions against vessels that sometimes carry crude oil exports from Iran. President Donald Trump has said he wants this trade to be reduced to zero in order to stop Iran from obtaining a nuclear bomb.
Why it’s important
Russia and Iran used the shadow fleet in order to avoid sanctions, and to send oil to large customers such as China and India. The trade of Russian oil under the $60 barrel price cap established by Western economies is not subject to sanctions, as long as the tankers are not designated. The bill establishes a coordination center for export enforcement run by the Secretary of Homeland Security.
By the Numbers
The bill creates a Russian Sanctions Enforcement Fund in the U.S. Treasury, with an initial 150 million dollars by 2025.
The U.S. will sell any oil it seizes and the money raised above a certain level would help to pay off the U.S.’s debt. However, the amount raised is tiny in comparison with the $36 trillion of debt.
Key quotes
“Russia continues its malign activities by operating a ‘ghost fleet’ to evade U.S. sanction, enrich its war machine, or even help Iranian oil smuggling,” Ernst said.
Ernst stated that the legislation would enhance intelligence sharing, and give law enforcement tools to pursue “illicit” networks of trade. This bill will not only disrupt Moscow’s malicious efforts to undermine U.S. laws, but also equip our nation with the tools to use seized assets to pay off our own debt.
Blumenthal stated: “This measure gives our export control real bite.”
What’s next?
There is no consensus on what will happen next with the bill, but many members of Congress from both parties are in agreement that there should be some action taken against Iran and Russia.
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Source: Reuters
