Legislation introduced on Wednesday by bipartisan U.S. senators aims to establish a fund specifically designed to enforce sanctions against Russia’s so-called “ghost fleet” of tankers. This fleet has been instrumental for Russia in transporting oil while circumventing Western sanctions imposed due to its ongoing war in Ukraine. The bill, championed by Senators Joni Ernst, a Republican, and Richard Blumenthal, a Democrat, will also focus on vessels that may be involved in the illicit transport of crude oil from Iran.
Former President Donald Trump had emphasized reducing Iranian oil trade to zero in order to curb its potential nuclear capabilities. The significance of this bill lies in its aim to disrupt the operations of both Russia and Iran, which have exploited the shadow fleet to trade oil with major customers such as China and India. Under current regulations, Russian oil sold below the $60 per barrel price cap established by Western economies is not subject to sanctions, provided that the vessels involved have not been designated.
The proposed legislation includes the creation of an export enforcement coordination center, managed by the Secretary of Homeland Security, to bolster these efforts. Financially, the bill sets up a Russian Sanctions Enforcement Fund at the U.S. Treasury, with an initial allocation of $150 million planned for 2025. Any oil confiscated by U.S. authorities would be sold, and proceeds exceeding certain thresholds would contribute to reducing the national debt, albeit the amount would be modest in the context of the $36 trillion debt.
Senator Ernst remarked on the importance of the legislation, stating that it equips law enforcement to tackle these illicit trade networks and helps utilize seized assets for national debt reduction. Senator Blumenthal echoed this sentiment, asserting that the measure strengthens U.S. export controls significantly. The future of this bill in Congress remains uncertain, though many lawmakers across party lines appear to support action regarding Russia and Iran.