In its final days, the Biden administration is again cracking down on Russia over its war with Ukraine, targeting the country’s production and exports of oil.
The U.S. Treasury Department unveiled new sweeping sanctions on Russia’s energy sector Friday in an effort to reduce Moscow’s revenue from oil that has continued to be shipped by a so-called “shadow fleet” of tankers.
“The United States is taking sweeping action against Russia’s key source of revenue for funding its brutal and illegal war against Ukraine,” Treasury Secretary Janet Yellen said in a statement. “This action builds on, and strengthens, our focus since the beginning of the war on disrupting the Kremlin’s energy revenues.”
The sanctions target over 180 vessels apart from this dark fleet of tankers that the administration said Russia has been using to evade existing sanctions, redirecting much of its oil to China or India.
The sanctions also target two major Russian oil producers, Gazprom Neft and Surgutneftegas, as well as their subsidiaries. Additionally, the sanctions are meant to block two Russian liquefied natural gas projects, a large Russian oil project, and numerous officials who work within the nation’s energy sector.
These measures are meant to cut off these individuals and Russian entities from the U.S. financial system, blocking all property and interests in the United States.
Administration officials have suggested these restrictions will end up costing the Russian economy billions of dollars every month.
The new sanctions are being put in place nearly three years after the Group of 7 nations set an oil “price cap” in an effort to limit Russian revenue on exports. Moscow has since exceeded this price cap of $60 per barrel using its “shadow fleet” of tankers.
The Biden administration had been weighing such sanctions against Russia for weeks. In December, Bloomberg reported that President Joe Biden was hesitant to issue the restrictions over fears that the decision would increase energy and gas costs around the world.
Prices of oil did shoot up just hours before the sanctions were announced, with international benchmark Brent crude rising by $2.50 (3.3%) to $79.42 a barrel, according to Reuters. West Texas Intermediate crude also jumped by $2.39 (3.2%) to $76.31.
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It remains unclear how effective these sanctions will be, as only 10 days remain for the current administration.
Senior administration officials have not detailed whether the sanctions have been discussed with President-elect Donald Trump and his transition team. However, officials told the New York Times that they expect the restrictions to provide the incoming administration with leverage over Moscow to end the war in Ukraine.