The U.S. Blockade on Oil Tankers
The U.S. has imposed a "total and complete blockade" on all sanctioned oil tankers going to and from Venezuela. This decision was highlighted by the seizure of the oil tanker "Skipper" near the Venezuelan coast, carrying nearly two million barrels of crude oil. The U.S. government claims the oil was being shipped at subsidized rates to Cuba, aiding Venezuelan President.
U.S. Sanctions and Global Financial Leverage
U.S. sanctions are a type of unilateral economic warfare aiming to achieve foreign policy objectives. Unlike international sanctions imposed by global bodies like the United Nations, which are legally enforceable, U.S. sanctions leverage the country’s control over the global financial system, particularly the U.S. dollar, to enforce its policies.
- Many global transactions require routing through U.S. financial systems, giving the U.S. significant leverage.
- U.S. companies are prohibited from trading with sanctioned nations, and foreign banks often comply to maintain access to the U.S. market.
- Past instances, like BNP Paribas paying $9 billion in fines for sanctions violations, highlight the potency of U.S. sanctions.
Impact on Global Shipping and Insurance
The enforcement of sanctions affects various aspects of global shipping, particularly insurance, which remains dominated by Western countries like the U.K.
- Insurance is critical for shipping operations, and major insurers withdraw coverage once a ship loses certification from classification societies, largely controlled by the International Association of Classification Societies (IACS).
- Sanctions can lead to the withdrawal of flag registrations, enabling navies to board ships under international law.
- For example, Russian ships were held in the Bosphorus due to insurance withdrawal following the invasion of Ukraine.
Shadow Fleet and Global Collaboration
Countries like Russia, Iran, Venezuela, and potentially China are working to counteract U.S. dominance in global finance and shipping. Ships like "Bella 1" and "Centuries" are part of a "shadow fleet" that attempts to bypass U.S. sanctions.
- Bella 1 was sanctioned by the Office of Foreign Assets Control (OFAC) for allegedly carrying cargo for a Hezbollah-owned company.
- Centuries, originally Greek-owned, now operates under a different flag and has lost its certification from major classification societies.
- Skipper, once owned by NYK and a Greek company, was accused of falsely flying the Guyana flag, a potential reason for detention under international law.
Conclusion
The U.S.'s physical blockade in Venezuela indicates some success by these nations in challenging U.S. financial and shipping control. However, the effectiveness and sustainability of these efforts remain uncertain given the complexity of global economic systems.
