WASHINGTON – The Biden administration announced on Friday a significant expansion of sanctions targeting Russia’s vital energy sector, a strategic move aimed at punishing Moscow for its ongoing military actions in Ukraine. This announcement comes just as President-elect Donald Trump prepares to take office, promising to swiftly address the conflict.
The latest sanctions represent what officials are calling the most impactful measures yet against Russia’s oil and liquefied natural gas industries, crucial components of the nation’s economy. Those subjected to these measures include entities conducting business with Russia, with experts predicting that this could cost the Russian economy billions of dollars monthly.
The new sanctions will impact over 180 oil-carrying ships believed to be part of a clandestine fleet utilized by the Kremlin to circumvent existing oil sanctions. Additionally, several traders, oil field services firms, and energy officials are among those targeted. Notably, some of these vessels are also implicated in transporting sanctioned Iranian oil, according to information from the Treasury Department.
President Biden commented on the situation, stating, “Putin is in tough shape right now, and it’s crucial he doesn’t have any opportunity to continue his destructive actions.” Alongside the United States, the U.K. has also enacted sanctions against Russian energy firms, collectively focusing on two key oil producers, Gazprom Neft and Surgutneftegas, along with numerous subsidiaries linked to these companies.
According to the Foreign Office, these two firms produce in excess of one million barrels of oil daily, equating to an annual worth of $23 billion. British Foreign Secretary David Lammy emphasized the importance of cutting down oil revenues, branding them the “lifeblood of Putin’s war economy.” He added, “Challenging Russian oil firms will deplete Russia’s war funds, and each ruble taken from Putin contributes to saving Ukrainian lives.”
The U.K. has already targeted nearly 100 vessels involved in what’s referred to as Russia’s oil-transporting shadow fleet. This collective effort by Western allies aims to amplify economic pressure on Moscow as negotiations regarding the end of the conflict loom.
White House national security spokesperson John Kirby explained that the decision for more stringent oil measures came at a time when concerns regarding global oil markets had eased, indicating that it was an appropriate moment for this significant action. He noted that Biden anticipated the sanctions might result in a slight decrease in gas prices, estimating around “three, four cents a gallon” for consumers.
Furthermore, the State Department announced travel bans for 14 senior officials and executives of Rosatom, which extend to their immediate family members. Administration officials indicated that it will ultimately be up to Trump’s team to either uphold or revoke these sanctions.
Trump’s transition representatives did not immediately comment on the sanctions. When asked if they had consulted with Trump’s incoming team, Kirby affirmed that the transition team had been kept informed regarding significant decisions and actions taken by the administration.
Mike Waltz, Trump’s new national security adviser, argued in a pre-election commentary that leveraging economic pressure could aid in subduing Russia’s illegal oil trade and encourage negotiations from President Putin. Trump mentioned on Thursday that he was arranging to meet with Putin, emphasizing his long-standing relationship with the Russian leader. His recent remarks have raised questions about future U.S. support for Ukraine, particularly after expressing skepticism about the country joining NATO, which he has criticized.
In conjunction with the sanctions announcement on Friday, Biden held a call with Ukrainian President Volodymyr Zelenskyy to reaffirm the U.S. commitment towards supporting Ukraine. Post-conversation, Biden expressed hope that bipartisan members of Congress would step forward to advocate for continued assistance should Trump opt to reduce or eliminate funding for Ukraine.
National security adviser Jake Sullivan underscored the risks of diminishing support for Ukraine, highlighting potential ramifications that could extend beyond Ukraine, impacting the stability of U.S. alliances in Europe and the Indo-Pacific. He asserted, “If the U.S. abandons Ukraine, it will reflect poorly on our European alliances and resonate in the broader globally competitive landscape.”
Ahead of these measures, the Kremlin dismissed the new round of sanctions, indicating a strategy by the outgoing administration to complicate relations for Trump and his team. The sanctions are enacted under authority tied to Russia’s earlier actions in Ukraine, along with stipulations that require the new administration to inform Congress about any potential rollback of these measures.
The shadow fleet underpinning Russia’s oil export strategy comprises old tankers acquired often under dubious circumstances, and registered in non-sanctioning nations such as the UAE or the Marshall Islands. Some vessels are linked to Russia’s state-operated Sovcomflot shipping company, assisting Russia in bypassing a $60 per-barrel price cap set by allies. Notably, Finnish authorities suspect that one of these vessels was involved in sabotaging crucial underwater cables affecting power and communication between Finland and Estonia late last month.
