The United States and the United Kingdom on Friday announced extensive sanctions targeting Russia’s energy sector, aiming to disrupt a significant revenue stream that fuels its ongoing war in Ukraine. The measures come just days before U.S. President Joe Biden leaves office, underscoring a final push to intensify economic pressure on Moscow.
The U.S. Treasury Department designated over 180 ships, alongside major Russian oil companies Gazprom Neft and Surgutneftegas, as part of a G7 commitment to curtail Russian energy revenues. Simultaneously, the UK sanctioned the same companies, accusing them of contributing to Russian President Vladimir Putin’s war chest.
“Taking on Russian oil companies will drain Russia’s war chest — and every ruble we take from Putin’s hands helps save Ukrainian lives,” UK Foreign Secretary David Lammy said in a statement. President Biden echoed this sentiment, telling reporters at the White House, “Putin is in tough shape right now, and it’s crucial we don’t give him breathing room.”
Industry Reaction and Market Impact
The sanctions elicited a sharp response from Gazprom Neft, which labeled the measures “baseless” and “illegitimate.” Russian state agencies quoted company representatives decrying the sanctions as contrary to principles of free competition. Rosatom, Russia’s state nuclear energy corporation, also condemned U.S. sanctions against its officials and entities, calling them “unreasonable and unlawful.”
Oil prices reacted to the announcement, with Brent crude futures for March delivery climbing 3.6%, closing at $79.68 per barrel. While Biden acknowledged potential increases in U.S. fuel prices—estimated at three to four cents per gallon—he emphasized the broader economic impact on Russia’s war machinery.
The Treasury Department’s action is part of a larger package targeting nearly 400 individuals and entities, including oil traders, oilfield service providers, and subsidiaries of Russian energy giants. The measures also include sanctions on entities involved in the production and export of liquefied natural gas (LNG), as well as the metals and mining sectors.
Global and Domestic Implications
The sanctions’ timing, just 10 days before President-elect Donald Trump assumes office, adds a layer of complexity to U.S. policy on Russia. Trump has expressed a desire to end the Ukraine conflict swiftly, raising questions about whether these measures will remain in place.
National Security Council spokesperson John Kirby defended the decision, citing improved oil market conditions and a resilient U.S. economy. “We believe the moment was ripe to adjust our strategy,” he said.
Ukrainian President Volodymyr Zelensky praised the sanctions, calling them a significant blow to Russia’s financial foundation. “These measures disrupt the entire supply chain of Russia’s war machine,” Zelensky stated on social media.
The sanctions aim to strengthen Western leverage in brokering a resolution to the conflict while reaffirming support for Ukraine as it continues to resist Russian aggression.
