President Joe Biden’s administration declared on Friday an extension of sanctions targeting Russia’s crucial energy sector as part of a strategy aimed at imposing economic strain on the nation due to the ongoing conflict in Ukraine. This announcement comes just as President-elect Donald Trump prepares to take office, promising to swiftly resolve the situation.
The newly introduced sanctions have been labeled by the outgoing administration as the most impactful measures undertaken against Moscow’s oil and liquefied natural gas industries, which are vital components of Russia’s economy. Officials indicated that these sanctions, meant to sanction entities engaged in business with Russia, could cost the nation billions of dollars each month.
Among those affected are over 180 oil-carrying vessels, thought to be part of a covert fleet utilized by the Kremlin to bypass oil sanctions. This group includes traders, oil field service companies, and various energy leaders from Russia. Some of these vessels are also suspected of transporting sanctioned Iranian oil, as noted by officials from the Treasury Department.
Treasury Secretary Janet Yellen emphasized the gravity of these actions, stating, “The United States is taking extensive measures against Russia’s main source of revenue to fund its violent and unlawful aggression towards Ukraine. With today’s steps, we are elevating the sanctions risks connected to Russia’s oil trade, including its shipping and financial dealings in support of oil exports.”
In a synchronized initiative, the United Kingdom also imposed sanctions on Russian energy firms. Both the U.S. and the U.K. are particularly focusing on significant Russian oil producers Gazprom Neft and Surgutneftegas, as well as their numerous subsidiaries, which together produce over 1 million barrels of oil daily, generating an annual worth of $23 billion. British Foreign Secretary David Lammy remarked that oil revenue serves as the backbone of Putin’s wartime economy, stating, “Confronting Russian oil companies will diminish Russia’s war funds – every ruble we prevent from reaching Putin aids in saving Ukrainian lives.”
The U.K. has already sanctioned nearly 100 vessels linked to Russia’s clandestine oil transport operations. This move is part of efforts by Ukraine’s Western allies to tighten economic pressure on Moscow ahead of potential peace negotiations.
National Security spokesman John Kirby indicated that the timing of the decision to implement stricter oil sanctions was influenced by easing concerns regarding global oil markets. Kirby explained, “This was driven by market conditions, making this an opportune moment for the decision, hence why the president acted.”
In conjunction with these sanctions, the State Department announced travel bans on 14 senior officials and executives from Rosatom, impacting their immediate families as well.
Administration officials noted that the future of these sanctions rests in the hands of Trump’s team, with inquiries about coordination with the incoming administration receiving a response that confirmed ongoing communication about key issues.
In an opinion piece prior to Election Day, Trump’s national security adviser appointee expressed that economic leverage should be employed to curtail Russia’s unlawful oil trades to encourage negotiations with President Putin. Meanwhile, Trump recently remarked that preparations for discussions with Putin are underway.
The scrutiny of Trump’s historical rapport with Putin continues, especially as he voices concerns about American financial support for Ukraine, asserting his intention to conclude the conflict promptly upon taking office on January 20. He also expressed doubts about Ukraine’s inclusion in NATO, criticizing Biden’s administration for advocating for Ukraine’s eventual membership in the alliance.
White House national security adviser Jake Sullivan warned that reducing support for Ukraine could trigger wider ramifications beyond Kyiv. He stressed the reliance on cooperation from European allies in the past four years to navigate the challenges posed by China’s economic competition, stating, “If the U.S. withdraws support for Ukraine, it could harm our European alliances and shake the Indo-Pacific region.”
The Kremlin dismissed the new sanctions, stating they were expected and asserting an intention to complicate the bilateral relations for Trump and his administration. The sanctions derive from authority established in response to Russia’s 2014 annexation of Crimea, according to official sources.
If the incoming Trump administration intends to reverse these sanctions, they would first need to inform Congress, which retains the option to vote against such actions.
Notably, the shadow fleet, which assists Russia’s oil sector in avoiding sanctions, is comprised of aging tankers often acquired by obscure entities using addresses linked to non-sanctioning countries, flagged under nations like Gabon or the Cook Islands. Some vessels belong to Russia’s state-owned shipping entity, Sovcomflot, and are involved in circumventing the $60 per barrel price limit enforced by allies of Ukraine.
Adding to the complexities, Finnish authorities suspect involvement of a shadow fleet vessel in a recent act of sabotage, which severed crucial power and communications links under the Baltic Sea. Simultaneously, the Biden administration announced a significant military aid package for Ukraine as President Zelenskyy met with U.S. Defense Secretary Lloyd Austin.
