The US Treasury and UK government have stepped up sanctions against Russia in a bid to cut off critical funding for its military operations in Ukraine, impacting major oil companies and traders.
Tough New Sanctions Target Russian Energy Revenue Amid Ongoing Conflict
Tough New Sanctions Target Russian Energy Revenue Amid Ongoing Conflict
US and UK ramp up sanctions on Russian oil to disrupt funding for the Ukraine war.
The Biden administration, in coordination with the UK, has instituted stringent sanctions against Russia, focusing on the oil industry which provides significant revenue for its ongoing military efforts in Ukraine. The latest measures target over 200 entities, including key energy firms like Gazprom Neft and Surgutneftegas — which are now facing direct sanctions, marking a significant escalation since the onset of full-scale conflict.
Foreign Secretary David Lammy emphasized the importance of these sanctions, stating, "Taking on Russian oil companies will drain Russia's war chest – and every ruble we take from Putin's hands helps save Ukrainian lives." The sanctions come on the heels of a commitment to institutionalize some measures, effectively requiring Congressional involvement for any potential reversal by future administrations.
In an effort to curtail legal purchases of Russian energy, the US is also focusing on dismantling Moscow’s so-called "shadow fleet" of oil transport vessels. US Treasury Secretary Janet Yellen noted that the new measures aim to increase the risks associated with Russian oil trade, including shipping and financial channels. President Biden remarked on the tightening of Russia's economic viability, asserting that "it's really important that he [Putin] not have any breathing room to continue to do the god-awful things he continues to do.”
While the sanctions may lead to minor gas price increases in the US, experts like Daniel Fried from the Atlantic Council believe that rising US oil production will mitigate potential impacts on the market. He commented that the actions taken against the Russian oil sector are a significant and targeted strike on its economy.
Former US ambassador to Ukraine, John Herbst, underscored that while the sanctions are commendable, their success hinges on effective implementation. “The Trump administration will determine if these measures do in fact put pressure on the Russian economy,” he stated, touching on the future implications of these sanctions in an evolving geopolitical landscape.
As the international community intensifies its stance against Russia's actions, questions remain regarding the long-term effectiveness of sanctions and their impact on both Russia and global energy markets.
