US and UK toughen sanctions on Russian oil industry

The Biden administration has imposed some of its toughest sanctions yet on Russia, in a shift designed to hit Moscow’s vigor income that is fuelling its war in Ukraine.

The measures target more than 200 entities and individuals ranging from traders and officials to insurance companies, as well as hundreds of oil tankers.

In a first since Moscow’s all-out invasion of Ukraine, the UK will join the US in directly sanctioning vigor companies Gazprom Neft and Surgutneftegas.

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

Some of the measures announced by the US Treasury on Friday will be put into law, meaning the incoming Trump administration will require to involve Congress if it wants to lift them.

Washington is also moving to severely limit who can legally purchase Russian vigor, and going after what it called Moscow’s “shadow fleet” of vessels that ship oil around the globe.

US Treasury Secretary Janet Yellen said the actions were “ratcheting up the sanctions uncertainty associated with Russia’s oil trade, including shipping and monetary facilitation in back of Russia’s oil exports.”

President Joe Biden said Russian chief Vladimir Putin was in “tough shape”, adding that “it’s really significant that he not have any breathing room to continue to do the god-awful things he continues to do.”

“It is probable that gas prices [in the United States] could boost as much as three or four cents a gallon,” said the president.

But, he added, the measures were likely to “have profound result on the growth of the Russian economy”.

Ukraine’s president, Volodymyr Zelensky, thanked the US for what he called its “bipartisan back”.

Since the beginning of the war in Ukraine, a worth cap on oil has been among the key measures designed to curb Russia’s vigor exports.

But as Olga Khakova from the Atlantic Council’s Global vigor Centre explained, its effectiveness was “diluted” because it was also trying to avoid the volume of Russian oil in the economy dropping.

This was due to concerns about the impact reduced supply would have on the global economy.

But experts said the oil economy was now in a healthier position.

“US oil production (and exports) are at record levels and rising, and therefore the worth impact of taking Russian oil off the economy, the objective of today’s sanctions, will be attenuated,” said Daniel Fried, a distinguished fellow at the Atlantic Council.

“The US government has gone after the Russian oil sector in a large way, intending to deal what may turn out to be a body blow,” Fried added.

John Herbst, a former US ambassador to Ukraine, said while the steps were “excellent”, their implementation would be critical.

“Which means that it is the Trump administration that will determine if these measures do in truth put pressure on the Russian economy,” he said.