US Stops Russian Oil Tanker en Route to New Orleans

US authorities stopped a ship loaded with Russian oil products on its way to Louisiana, sources told the Wall Street Journal reported Tuesday.

The ship departed in early June from the Taman peninsula in Russia and intended to reach New Orleans by Sunday, according to the Journal.

But authorities prevented the tanker from discharging its cargo, which had been labeled as coming from Russia. The ship is currently being checked out by US Customs and Border Protection.

The tanker is owned by Greece's TMS Tankers and was chartered by Swiss commodities trader Vitol, which told the Journal it operates "in full compliance with all relevant laws and regulations, including sanctions."

The cargo consists of fuel oil, which is used in boilers and furnaces, as well as vacuum gasoil, which is used to produce gasoline and diesel.

The US banned Russian energy imports — including crude oil, refined fuels, liquefied natural gas and coal — in early March in response to Vladimir Putin's war on Ukraine.

But the US embargo doesn't ban oil and fuels that originated in another country, such as Kazakhstan, and travel through Russia en route to an export market, the Journal pointed out, adding that the Taman peninsula ships Russian and Kazakh oil products.

"I find it very surprising that given the U.S. import ban, anyone would be doing this," Livia Gallarati, an oil markets analyst at Energy Aspects, told the Journal. "It could be Kazakh. Although Kazakh exports of oil products to international markets are minimal."

In addition to US sanctions on Russian energy and the EU's partial sanctions that are being phased in, the oil industry has self-sanctioned by avoided business dealings with Moscow. But others hide transactions with Russia.

Wary buyers have attempted to avoid affiliation with the sanctioned nation through obfuscating the origins of crude and trading oil marked "destination unknown."

Another masking ploy is to make ship-to-ship transfers of Russian oil on the high seas, which typically involves a Russian ship unloading oil to another vessel from a neutral party.

Yet another workaround being used to hide the origin of Russian oil is paying in China's yuan rather than the US dollar, the standard currency for trade.