The United States on Friday announced new sanctions targeting Russia's energy sector and its “shadow fleet” of oil tankers.
President Biden has been is cautious in his approach The imposition of sanctions on Russia's energy sector is feared that halting its exports will lead to higher gasoline prices around the world. But U.S. officials have said that healthier global oil supplies and weaker inflation provide an opportunity to put more pressure on Russia's oil industry as the war approaches its fourth year.
Despite coordinated efforts by Western allies to punish Moscow economically for its actions, the Russian economy has avoided the collapse many economists predicted.
The Biden administration's actions will leave the Trump administration with the task of deciding whether to impose sanctions. Senior Biden administration officials demurred when asked whether the sanctions had been discussed with President-elect Donald J. Trump's transition team, but they said they expected measures that would give the next administration additional leverage over Russia to negotiate an end to the war.
“The United States is taking far-reaching steps against a major source of revenue to finance Russia's brutal and illegal war against Ukraine,” Treasury Secretary Janet L. Yellen said. “With today's sanctions, we are increasing the risk of sanctions related to Russia's oil trade, including shipping and financial assistance to support Russian oil exports.”
Oil prices rose on Friday amid concerns that new restrictions ahead of the announcement of sanctions, severe weather in the United States and wildfires in California could limit global energy supplies.
The new sanctions target more than 180 vessels in Russia's shadow tanker fleet, which Moscow uses to evade existing oil sanctions. They also blacklisted Russia's two leading oil producers, Gazprom Neft and Surgutneftegaz, and their subsidiaries.
The sanctions target Russian liquefied natural gas projects, Russian energy officials and service providers that support the country's energy industry. And they limit some of the exemptions available to banks to continue facilitating Russian energy deals.
US sanctions can essentially exclude an individual or company from the Western financial system.
The Biden administration said it would significantly erode Russia's oil revenues and cost the Russian economy billions of dollars a month. The senior officials, who spoke on condition of anonymity to discuss the administration's thinking, described the sanctions package as the most significant to date on Russia's energy sector.
Since the start of the war, Mr. Biden has been warning global oil markets against turmoil at a time when inflation has soared. In 2022, the group of 7 nations created an oil “price ceiling” aimed at limiting how much Russia can earn from the oil it exports. Over time, this strategy became less effective as Russia developed measures such as a shadow fleet of old tankers. evading sanctions.
However, with inflation under control and the presidential election over, the administration has taken a more aggressive approach toward Russia in recent months.
Daleep Singh, the deputy national security adviser for international economics, said it was a “fair question” to ask why Mr. Biden would wait until the end of the administration to impose such sanctions.
“For sanctions to be successful, they must be sustained,” Mr. Singh said in a statement. “That doesn't mean they have to be costly — sanctions never are — but to be successful, they have to do more than harm the U.S. and global economy.”
In late November, the Treasury Department imposed sanctions on Russia's Gazprombank, a major financial institution that is a conduit for Russian energy payments and purchases of military equipment used by Moscow in Ukraine.
Last month, the United States transferred $20 billion in loans to Ukraine.
Although the Russian economy has proven to be resilient, it is still under pressure.
High inflation has prompted the country's central bank to raise benchmark interest rates 21 percent. Economic growth slows down and crop shortages occur.
The Russian economy is expected to grow by 1.3 percent next year, down from 3.6 percent in 2024, according to International Monetary Fund forecasts. Annual inflation in Russia is estimated to be around 10 percent in 2024, with prices of many staple foods doubling or tripling. total number.
The national currency, the ruble, fell to its weakest level since the start of the war in November, undermining Russia's purchasing power.
The effectiveness of the latest round of US sanctions will ultimately be determined by the Trump administration, which will be responsible for implementing them and potentially reversing them.
Mr. Trump has indicated that he wants to broker a deal with Russia and Ukraine to end the war. While Mr. Trump has used sanctions aggressively in office, he expressed concern during his campaign last year about the impact of sanctions on the dollar and its status as the world's reserve currency.
“I use sanctions very strongly against countries that deserve it, and then I remove them,” Mr. Trump said at the Economic Club of New York in September.