Sanctions Evasion Reference

Price cap

A measure permitting specified services for seaborne oil only where the cargo was bought at or below a stated price, enforced through the service providers rather than at the border.

reviewed

2026-08-20

The price cap is an unusual instrument. Rather than prohibiting a trade, it conditions the availability of the shipping, insurance, brokering and financing services that the trade needs, and it delegates verification to those service providers.

Its enforcement therefore rests on attestations passed along the chain, and the 2023 maritime oil advisory sets out how those attestations are meant to work and what an unreliable one looks like: no itemisation of ancillary costs, refusal to provide underlying documentation, and freight or insurance charges far above market that hide the true price paid.

Where this term is used

  • What is opaque marine insurance? — Presenting protection and indemnity or hull cover from a provider that cannot be identified, or whose ability to meet a claim cannot be established, in order to satisfy a requirement to be insured.
  • What is price cap attestation fraud? — Providing a false or unsupported statement that oil was bought at or below a capped price, so that shipping, insurance and financing services remain available for a cargo that does not qualify.
  • What is trade misinvoicing? — Trade misinvoicing is misstating the price, quantity or description of goods on trade documents, so that value moves across a border in a direction and an amount the paperwork does not admit.

Related terms

  • Attestation — A signed statement by a party in a transaction confirming a fact that the recipient cannot itself observe, relied on as the basis for providing a service.
  • Protection and indemnity club — A mutual association of shipowners that provides third-party liability cover, including for pollution, which ports and states generally require before a vessel may trade.
  • Shadow fleet — A loosely defined group of ageing tankers with opaque ownership and insurance that carry sanctioned or price-capped cargo outside mainstream shipping arrangements.

Sources

  1. Sanctions Advisory for the Maritime Oil Industry and Related Sectors. U.S. Department of the Treasury, Office of Foreign Assets Control, 2023. Price cap advisory, 12 October 2023.

All glossary terms