The United States, in partnership with the United Kingdom, has announced a significant escalation of sanctions targeting Russia's oil industry. On Friday, the US Treasury revealed measures aimed at over 200 entities and individuals, including traders, officials, insurance companies, and hundreds of oil tankers. These sanctions are a part of a broader strategy to weaken Russia's economy and limit its ability to finance the ongoing war in Ukraine. The sanctions will be put into law, making it necessary for the incoming Trump administration to involve Congress if any attempt is made to lift them.
The Biden administration's latest sanctions represent some of the toughest imposed on Russia to date. US Treasury Secretary Janet Yellen explained that these actions are crucial for reducing Moscow's energy revenue, which is fueling its war efforts in Ukraine. The UK will also join the US in directly sanctioning major Russian energy companies, Gazprom Neft and Surgutneftegas.
"Taking on Russian oil companies will drain Russia's war chest – and every ruble we take from Putin's hands helps save Ukrainian lives." – Foreign Secretary David Lammy
The sanctions aim to curb Russia's energy exports, with a specific focus on limiting who can legally purchase Russian energy. A price cap on oil has been a key measure since the war began, designed to restrict Russia's global energy trade. The US is now targeting Moscow's so-called "shadow fleet" of vessels that transport oil worldwide, further tightening the noose around Russia's oil sector.
"Ratcheting up the sanctions risk associated with Russia's oil trade, including shipping and financial facilitation in support of Russia's oil exports." – US Treasury Secretary Janet Yellen
President Joe Biden emphasized the necessity of these actions, stating that Russian leader Vladimir Putin is in "tough shape." Ukraine's President Volodymyr Zelensky expressed gratitude to the US for its "bipartisan support."
"It's really important that he not have any breathing room to continue to do the god-awful things he continues to do." – President Joe Biden
Experts have weighed in on the potential impact of these measures. John Herbst, former US ambassador to Ukraine, lauded the steps as "excellent," but noted that effective implementation will be critical. Daniel Fried, a distinguished fellow at the Atlantic Council, described the sanctions as a "significant escalation" of the US response to Russia's invasion.
"US oil production (and exports) are at record levels and rising, and therefore the price impact of taking Russian oil off the market, the objective of today's sanctions, will be attenuated." – Daniel Fried
"The US government has gone after the Russian oil sector in a big way, intending to deal what may turn out to be a body blow." – Daniel Fried
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