The United States and the United Kingdom toughen sanctions on the Russian energy industry

The Biden administration has imposed some of its toughest sanctions yet on Russia, in a move designed to hit Moscow’s energy revenues that are fueling its war in Ukraine.

The measures are aimed at more than 200 entities and individuals, from merchants and officials to insurance companies, as well as hundreds of oil tankers.

For the first time since Moscow’s full invasion of Ukraine, the UK will join the US in directly sanctioning energy companies Gazprom Neft and Surgutneftegas.

“Taking on Russian oil companies will deplete Russia’s war chest, and every ruble we take out of Putin’s hands helps save Ukrainian lives,” said Foreign Secretary David Lammy.

Some of the measures announced by the US Treasury on Friday will become law, meaning the incoming Trump administration will need to involve Congress if it wants to lift them.

Washington is also taking steps to severely limit who can legally buy Russian energy and go after what it called Moscow’s “shadow fleet” of ships that ship oil around the world.

US Treasury Secretary Janet Yellen said the actions were “increasing the risk of sanctions associated with Russia’s oil trade, including shipping and financial facilitation in support of Russia’s oil exports.”

President Joe Biden said Russian leader Vladimir Putin was in “bad shape” and added that “it’s really important that he doesn’t have any respite from continuing to do the awful things he continues to do.”

Ukrainian President Volodymyr Zelensky thanked the United States for what he called its “bipartisan support.”

Since the beginning of the war in Ukraine, a cap on the price of oil has been one of the key measures designed to curb Russia’s energy exports.

But as Olga Khakova of the Atlantic Council’s Global Energy Center explained, her effectiveness was “diluted” because it was also trying to prevent the volume of Russian oil on the market from falling.

This was due to concerns about the impact that reduced supply would have on the global economy.

But experts said the oil market is now in a healthier position.

“US oil production (and exports) are at record levels and rising, and therefore the impact on prices of removing Russian oil from the market, the target of today’s sanctions, will be mitigated” said Daniel Fried, distinguished fellow at the Atlantic Council. .

“The US government has heavily pursued the Russian oil sector, seeking to deliver what could prove to be a severe blow,” Fried added.

John Herbst, former US ambassador to Ukraine, said that while the measures were “excellent”, their implementation would be critical.

“Which means it is the Trump administration that will determine whether these measures actually put pressure on the Russian economy,” he said.