US and UK Impose “Harsh” Sanctions on Russian Energy Sector
On Friday, the United States and the United Kingdom announced new, severe sanctions targeting
Russia’s energy sector in an effort to limit Moscow’s funding of its war in Ukraine.
The Biden administration unveiled what has been described as the broadest package of sanctions yet, directly aiming at Russia’s oil and gas revenues. This move seeks to provide Kyiv and the
administration of the newly elected President Donald Trump with the necessary leverage to
negotiate peace in Ukraine.
These sanctions are aimed at reducing the oil revenues that Russia has been using to finance its
military actions in Ukraine, which began in February 2022.
What Are the Sanctions Imposed on Russia?
Dalip Singh, the White House’s senior economic and security advisor, stated that these measures
are “the most significant sanctions to date on Russia’s energy sector, which is the primary source
of revenue for (President Vladimir) Putin’s war.”
The U.S. Department of Treasury has imposed sanctions on major Russian companies like
Gazprom and Surgutneftegas for their roles in oil exploration, production, and sales. Additionally,
183 oil tankers have been sanctioned, many of which are part of what is known as the ‘shadow
fleet’—older vessels operated by non-Western companies. The sanctions also target networks
involved in the trading of oil.
Many of these tankers have been used to ship oil to countries like India and China, following the
price cap imposed by the G7 in 2022, which redirected a significant portion of Russian oil trade
from Europe to Asia.
Furthermore, the Treasury eliminated an exemption that previously allowed energy payment
intermediaries to bypass the sanctions on Russian banks.
The UK, on its part, has also sanctioned Gazprom and Surgutneftegas. The British Foreign Office
noted in a press release that these companies produce over a million barrels of oil daily,
generating approximately $23 billion annually.
These sanctions are part of broader efforts where the Biden administration has provided Kyiv
with military aid totaling about $64 billion since the start of Russia’s military operation in
Ukraine. This week’s aid package included air defense missiles, air-to-surface munitions, and
support equipment for fighter jets, valued at $500 million.
The sanctions announced on Friday follow previous actions in November against banks like
Gazprombank, a key connector for Russia to the global energy market, and earlier sanctions last
year on dozens of tankers carrying Russian oil.
