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The Biden administration on Friday issued sweeping sanctions targeting the Russian energy sector, taking aim at Moscow’s oil revenues just days before Donald Trump takes office.
The measures include sanctions on Russian oil producers Gazprom Neft and Surgutneftegas, and the blacklisting of 183 vessels involved in Russian energy exports.
Dozens of traders, Russia-based oilfield service providers and energy officials were also targeted.
The US Treasury said the UK would apply sanctions to the two major oil producers in co-ordination with Washington.
“Taking on Russian oil companies will drain Russia’s war chest — and every rouble we take from Putin’s hands helps save Ukrainian lives,” said UK foreign secretary David Lammy on Friday.
Brent oil, the international benchmark, rose to a three-month high of $79 per barrel after the announcement.
The outgoing Biden team said it was able to take such significant action on Russia’s energy sector, the country’s largest and most significant source of revenue, because oil markets are expected to be oversupplied in 2025.
It also noted that US inflation had dropped to within range of the Federal Reserve’s 2 per cent target.
“To put it plainly, the context changed, and so the moment was ripe to change our strategy,” one senior Biden administration official said.
The last-minute move creates a challenge for President-elect Trump, who campaigned on ending the war between Russia and Ukraine quickly and has expressed scepticism of imposing additional sanctions, saying in September: “I want to use sanctions as little as possible.”
Should he try to undo the moves, Trump could face pressure from Congress, where Republican members had urged President Joe Biden to do more to crack down on Russian energy revenues.
Under existing sanctions authorities, Congress would be notified if Trump tried to reverse the new measures, and could vote on a resolution of disapproval.
The outgoing Biden team said the sanctions would be a useful tool for the new Trump administration, which has largely distanced itself from Biden’s Ukraine strategy.
While on the campaign trail, Trump pledged to end the war between Russia and Ukraine within 24 hours, although he now says that he will try to end it in six months.
“The next administration will have to make a decision about what they want to do, but we think that by taking these actions, it puts them in a better position to help find just and sustainable peace from this conflict,” another senior Biden administration official said.
As part of the package, the state department blocked two active Russian liquefied natural gas facilities, a large Russian oil project and foreign organisations supporting Russia’s oil exports.
It also blacklisted Russia-based oilfield service providers and senior officials of state-run nuclear energy company Rosatom.
Adding 183 vessels directly to the sanctions lists, rather than the companies which manage or own them, may have a significant effect.
FT analysis has found that the 54 oil tankers previously blocked by the US were forced to carry dramatically less oil because it became riskier for their counterparties to do business with them.
Some of the vessels sanctioned on Friday were listed for making “calls in a Russian port where oil has consistently traded well above the $60 price cap on Russian-origin crude oil”.
Since December 2022, Ukraine’s allies have sought to keep Russian oil flowing but to restrict the Kremlin’s revenues from the trade by placing a limit on the price.
Ingosstrakh, a large Russian company previously identified by the FT as a significant insurer of shadow fleet vessels, has also been added to the list.
Should the new sanctions be fully enforced, they will undermine Russia’s oil revenues and increase its energy costs by upwards of billions per month, the first Biden administration official said.
“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,” said US Treasury Secretary Janet Yellen.
The US has imposed more than 5,000 sanctions and export controls on Russia since it launched its full-scale invasion of Ukraine in February 2022.
Friday’s measures follow the Biden administration’s November 2024 decision to sanction Russia’s state-owned Gazprombank, the main conduit for Russian energy payments as part of its efforts to restrict the Kremlin’s ability to fund its war effort.
Additional reporting by Lucy Fisher
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