People gather near a damaged store following shelling, which local officials called a Ukrainian military strike, in Donetsk, Russian-controlled Ukraine, on January 10, 2025, amid the ongoing Russian-Ukrainian conflict. (Photo by STRINGER / AFP)
WASHINGTON, United States — The United States announced widespread sanctions against Russia’s energy sector Friday, designating more than 180 ships and two major oil companies just days before outgoing President Joe Biden leaves office.
The designations “fulfill the G7 commitment to reduce Russian revenues from energy,” the US Treasury Department said in a statement, adding that the United Kingdom was also announcing sanctions against the country’s oil and gas sector.
In total, the United States is sanctioning 183 oil-carrying vessels, Russian oil traders and oilfield providers, and two Russian oil majors — Gazprom Neft and Surgutneftegas — along with more than two dozen of their subsidiaries.
They are the most significant sanctions yet to be levied against the country’s energy sector, senior administration officials told reporters, noting that they expect them to cost the Russian economy “upwards” of billions of dollars each month.
They are designed to give the United States additional leverage to help broker a “just peace” between Ukraine and Russia, the officials added.
“The United States is taking sweeping action against Russia’s key source of revenue for funding its brutal and illegal war against Ukraine,” US Treasury Secretary Janet Yellen said in a statement.
“With today’s actions, we are ratcheting up the sanctions risk associated with Russia’s oil trade, including shipping and financial facilitation in support of Russia’s oil exports,” she added.
Strong economy-influenced timing
Friday’s announcement comes just 10 days before US President Joe Biden is due to step down, and puts President-elect Donald Trump in something of an awkward position, given his stated desire to end the Ukraine war on day one of his presidency.
The timing of the decision was influenced by the relative strength of the oil sector and the US economy, according to the senior administration officials, who noted that both oil prices and inflation had fallen significantly since Russia’s invasion of Ukraine in 2022.
Alongside Treasury, the US State Department is also taking action against Russia’s energy sector, “blocking two active liquefied natural gas projects, a large Russian oil project, and third-country entities supporting Russia’s energy exports,” the Treasury Department said.
The State Department is also designating “numerous Russia-based oilfield service providers and senior officials of State Atomic Energy Corporation Rosatom,” they added
The UK is also taking action against two major Russian oil producers, according to the US Treasury Department.
Friday’s sanctions are the latest in a long line of announcements by the US and its G7 allies targeting the Russian economy — including its lucrative oil and gas sector — over its 2022 invasion of Ukraine.
The United States and its allies imposed a price cap on Russian oil in a bid to limit petroleum sales and revenues without curbing exports so sharply that it would cause global oil prices to soar.
But some countries, notably China, have continued to import Russian crude oil without observing the price ceiling.
To skirt the measures targeting its oil sector, Russia has also resorted to using a so-called “shadow fleet” of often aging vessels that operate under dubious ownership or without proper insurance.
Last month, European Union countries agreed to blacklist around 50 additional oil tankers from Russia’s “shadow fleet,” the trading bloc’s fifteenth package of sanctions since the 2022 invasion of Ukraine.