US imposes wide-ranging sanctions on Russian oil sector

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The Biden administration on Friday issued sweeping sanctions targeting Russia’s energy sector, targeting Moscow’s oil revenues just days before Donald Trump takes office.

The measures include imposing sanctions on the two Russian oil companies, Gazprom Neft and Surgut Neftegaz, and blacklisting 183 ships involved in Russian energy exports.

Dozens of traders, oilfield service providers and energy officials in Russia were also targeted.

The US Treasury Department said that the United Kingdom will implement sanctions on major oil producers in coordination with Washington.

British Foreign Secretary David Lammy said on Friday: “Seizing Russian oil companies will drain Russia’s war coffers – and every ruble we take from Putin’s hands helps save Ukrainian lives.”

Brent crude, the international benchmark, rose to a three-month high of $79 a barrel after the announcement.

The outgoing Biden team said that it was able to take such an important measure on Russia’s energy sector, which is the country’s largest and most important source of revenue, because oil markets are expected to see an increase in supply in 2025.

The report also noted that US inflation has fallen to the Federal Reserve’s 2 percent target range.

“Frankly, the context changed, so the moment was right to change our strategy,” a senior Biden administration official said.

The last-minute move creates a challenge for President-elect Trump, who campaigned on quickly ending the war between Russia and Ukraine and has expressed doubts about imposing additional sanctions, saying in September: “I want to use sanctions as little as possible.”

If he tries to reverse these moves, Trump could face pressure from Congress, where Republican members have urged President Joe Biden to do more to eliminate Russian energy revenues.

Under current sanctions powers, Congress would be notified if Trump tried to roll back the new measures, and could vote on a resolution of disapproval.

The outgoing Biden team said sanctions would be a useful tool for the new Trump administration, which has largely distanced itself from Biden’s Ukraine strategy.

During his election campaign, Trump pledged to end the war between Russia and Ukraine within 24 hours, though he now says he will try to end it within six months.

“The next administration will have to decide what they want to do, but we believe that by taking these actions, it puts them in a better position to help create a just and sustainable peace from this conflict,” another senior Biden administration official said. He said.

As part of the package, the State Department closed two active Russian liquefied natural gas facilities, a major Russian oil project and foreign organizations that support Russian oil exports.

It also blacklisted oilfield service providers based in Russia and senior officials at the state-run nuclear energy company Rosatom.

Adding 183 ships directly to the sanctions lists, rather than the companies that operate or own them, could have a significant impact.

The Financial Times analysis found that the 54 oil tankers previously blocked by the US had to carry significantly less oil because it had become more dangerous for their counterparts to handle.

Some of the sanctioned vessels were listed on Friday for making “calls at a Russian port where oil is consistently trading well above the maximum price of $60 for crude oil of Russian origin.”

Since December 2022, Ukraine’s allies have sought to keep Russian oil flowing but limit the Kremlin’s revenue from trade by setting a price cap.

Ingosstrakh, a large Russian company previously identified by the Financial Times as an important insurer of Shadow Fleet ships, has been added to the list.

The first Biden administration official said that if the new sanctions were fully implemented, they would undermine Russian oil revenues and increase energy costs by more than billions per month.

US Treasury Secretary Janet Yellen said: “We are working to escalate the sanctions risks associated with Russian oil trade, including shipping and financial facilities to support Russian oil exports.”

The United States has imposed more than 5,000 sanctions and export restrictions on Russia since it launched its massive invasion of Ukraine in February 2022.

Friday’s actions follow the Biden administration’s November 2024 decision to impose sanctions on Russia’s state-owned Gazprom Bank, the main conduit for Russian energy payments as part of its efforts to restrict the Kremlin’s ability to finance its war effort.

Additional reporting by Lucy Fisher