The United States and the UK are unveiling a sanctions regime against Russia to increase the cost of the Eurasian power’s war in Ukraine.
The sweeping new sanctions aim to erode Russia’s ability to bring in revenues from its energy sector, according to a Treasury Department fact sheet shared with The Epoch Times.
Russian oil giants Gazprom Neft and Surgutneftegas will be blacklisted, as will dozens of their subsidiaries and all entities that are at least 50 percent owned by the two companies or any of their subsidiaries.
Deputy national security adviser Daleep Singh said in a statement shared with The Epoch Times that the new sanctions would affect virtually all parts of Russia’s oil and natural gas sector.
“These sanctions will hit hard across every key node of Russia’s oil production and distribution chain, including against two of the four largest Russian oil producers, dozens of oilfield service providers, traders of Russian oil across the world, more than 150 vessels moving seaborne Russian oil, and an oil terminal that knowingly received sanctioned oil from sanctioned vessels,” Singh said.
The new sanctions also prohibit providing U.S. petroleum services to anyone located in the Russian Federation, with the aim of debilitating Russia’s access to U.S. services used to extract oil.
New sanctions also apply to 183 oil-carrying vessels, including several that operate as part of Russia’s so-called shadow fleet, which is vital to Moscow’s ability to smuggle oil.
In addition to the Treasury Department’s sanctions, the State Department is blocking some liquefied natural gas (LNG) and oil projects and entities from other countries that support Russia’s energy exports.
It is hoped that these actions will substantially increase the risks associated with the Russian oil trade and thereby further increase Russia’s costs to maintain its wartime economy.
“With less capital, less technology, and less talent, the endgame facing Moscow is further descent into a smaller, weaker, and isolated pariah state,” Singh said.
A senior Biden administration official told reporters on Jan. 9 that Russian inflation was hovering at about 9 percent, and the new sanctions package was expected to push that number beyond 10 percent in 2025.
The administration has largely shied away from targeting Russia’s oil and natural gas industry with severe sanctions until now because of macroeconomic troubles in the United States and elsewhere.
White House National Security Council spokesman John Kirby told reporters on a Jan. 10 press call that the fear of increasing inflation and prices at the pump in the United States had previously been a larger concern.
The global oil supply is now expected to outsize demand for the foreseeable future, meaning that the United States can more freely target Russian energy without fear of hurting consumers at home.
“These sanctions target both Russian oil and LNG, and we expect our actions to cost Russia upwards of billions of dollars per month,” Kirby said.
“We’re able to take this significant action because, No. 1, oil markets are in a fundamentally better place, [and] No. 2, the U.S. economy is in a fundamentally better place.”
New prohibitions on Russian-produced oil and petroleum products will take effect on Feb. 27, after President-elect Donald Trump takes office for a second term.
To that end, one senior administration official who spoke to reporters on Jan. 9 said the Biden administration had kept Trump’s transition team informed of the decisions and that many of the new sanctions were previously recommended by Republican lawmakers, including Trump’s incoming national security adviser, Rep. Mike Waltz (R-Fla.).
“We’re in no position to speak for the next team,” the official said. “It’s entirely up to them to determine whether, when, and on what terms they might lift any sanctions we’ve put into place.
“These actions together provide the next administration a considerable boost to their and Ukraine’s leverage in brokering a just and durable peace.”
