US, UK impose sweeping sanctions on Russia’s oil industry

The United States and the United Kingdom imposed further sanctions on Russia’s energy sector on Friday in an attempt to curb funding for Moscow’s full-scale invasion of Ukraine.

The US Treasury Department said it was designating two of Russia’s largest oil companies, Gazprom Neft and Surgutneftegas, fulfilling “the G7 commitment to reduce Russian revenues from energy.”

The sanctions also apply to 183 vessels that the US government believes are part of Moscow’s “shadow fleet” of ships allegedly used to evade existing sanctions on the transport of Russian oil.

In addition, the measures target specific projects and infrastructure for liquefied natural gas, as well as subcontractors, service providers, traders and maritime insurers, the Treasury Department said.

UK coordinates sanctions with US

At the same time, the UK government imposed its own sanctions on Gazprom Neft and Surgutneftegas, saying their profits were “lining (Russian President Vladimir) Putin’s war chest and facilitating the war” in Ukraine.

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

The Foreign Office said that between them the two companies produce more than 1 million barrels of oil a day, worth $23 billion (€22.4 billion) a year.

The UK has already sanctioned nearly 100 ships in Russia’s oil-carrying “shadow fleet” as Ukraine’s Western allies seek to increase economic pressure on Moscow ahead of negotiations to end the war.

Up to Trump whether to keep sanctions

The US administration chose this time, just 10 days before President Joe Biden leaves office, to take tougher action on oil because concerns about global oil markets have eased, White House national security spokesman John Kirby said.

Biden told reporters he expected the move could cost drivers “three, four cents a gallon” at the pump.

Biden administration officials said it will ultimately be up to President-elect Donald Trump’s administration to decide whether to keep or scrap the new sanctions.

Biden and Zelenskyy discuss US support, sanctions

Ukrainian President Volodymyr Zelenskyy welcomed new US sanctions against Russia’s oil sector and its so-called shadow tanker fleet.

“These measures deliver a significant blow to the financial foundation of Russia’s war machine by disrupting its entire supply chain,” he wrote on X.

According to White House, Biden spoke with Zelenskyy as the sanctions were announced, discussing his administration’s continued support for efforts to rein in Russia and underscoring the need for that support to continue.

In a social media post, Zelenskyy thanked Biden for Washington‘s support in Ukraine’s nearly three-year war with Russia and for “the vital role the United States has played in uniting the international community.”

Zelenskyy later also expressed thanks for British sanctions against Russian oil companies, saying on X that London “delivers yet another significant disruption to Putin’s ability to finance aggression.”

dh/wmr (AP, AFP, dpa, Reuters)