The Biden administration has announced some of its most stringent sanctions yet on Russia, targeting the nation’s oil industry in an effort to diminish its energy revenue that fuels its ongoing war in Ukraine. These measures aim to impact over 200 entities and individuals, including traders, officials, insurance firms, and hundreds of oil tankers.
For the first time since Russia’s invasion of Ukraine, the UK has joined the US in directly sanctioning prominent energy companies Gazprom Neft and Surgutneftegas. Foreign Secretary David Lammy emphasized that targeting Russian oil companies would “drain Russia’s war chest,” ensuring that every ruble taken from President Vladimir Putin’s regime would contribute to saving Ukrainian lives.
The US Treasury’s latest actions include implementing measures that are now set to become law, which would require the next US administration to involve Congress if it wishes to reverse these sanctions. Additionally, Washington is taking steps to severely restrict who can legally purchase Russian energy, including pursuing Moscow’s “shadow fleet” of vessels used to ship oil globally.
Treasury Secretary Janet Yellen stated that these actions are intended to “ratchet up the sanctions risk” surrounding Russia’s oil trade, including its shipping and financial facilitation. President Joe Biden remarked that President Putin is in “tough shape,” stressing the importance of limiting his resources to halt the continuation of the war.
Despite concerns over rising US gas prices by a few cents per gallon, the president believes that these sanctions will have a significant impact on Russia’s economic growth. Ukrainian President Volodymyr Zelensky expressed gratitude for the US’s bipartisan support.
While earlier measures like a price cap on Russian oil aimed to curb exports, experts argue that its impact was weakened by the desire to maintain stable global oil supply levels. However, with US oil production at record highs, the latest sanctions on Russian oil exports could have a more pronounced effect on both the Russian economy and the global market.
Analysts suggest that while the sanctions are a significant step, the real challenge lies in their implementation and enforcement. Former US Ambassador to Ukraine John Herbst emphasized that the effectiveness of these measures would depend on how they are executed moving forward.