U.S. Imposes New Sanctions to Squeeze Russia’s Energy Sector, 10 January 2025

The United States...announced new sanctions targeting Russia’s energy sector and its “shadow fleet” of oil tankers in what could be a final attempt by the Biden administration to cripple the Russian economy in response to Moscow’s war in Ukraine.

President Biden has been cautious in his approach to sanctions on Russia’s energy sector out of concern that shutting off its exports would send gasoline prices surging around the world. But U.S. officials said healthier global oil supplies and the easing of inflation presented an opportunity to exert more pressure on Russia’s oil industry as the war approaches its fourth year...

The moves from the Biden administration will put the onus on the Trump administration to decide whether to enforce the sanctions. Senior Biden administration officials demurred when asked if the sanctions were discussed with President-elect Donald J. Trump’s transition team but said they expected the measures to provide the next administration with additional leverage over Russia to negotiate an end to the war.

“The United States is taking sweeping action against Russia’s key source of revenue for funding its brutal and illegal war against Ukraine,” Treasury Secretary Janet L. Yellen said in a statement. “With today’s sanctions, we are ratcheting up the sanctions risk associated with Russia’s oil trade, including shipping and financial facilitation in support of Russia’s oil exports.”

Oil prices jumped...ahead of the announcement of the sanctions amid concerns that new restrictions, along with severe weather in the United States and wildfires in California, could constrain global energy supplies.

The new sanctions target more than 180 vessels from Russia’s fleet of shadow tankers that Moscow has used to evade existing oil sanctions. They also blacklist two leading Russian oil producers, Gazprom Neft and Surgutneftegas, and their subsidiaries.

The sanctions take aim at Russian liquefied natural gas projects, Russian energy officials and providers of services that support the country’s energy industry. And they limit some of the exceptions that have been in place to allow banks to continue facilitating Russian energy transactions...

The Biden administration said this will substantially undermine Russia’s oil revenues and cost the Russian economy billions of dollars per month. Senior officials, speaking on the condition of anonymity to discuss the administration’s thinking, described the package of sanctions as the most significant to date on Russia’s energy sector...