Biden Weighs New Sanctions on Russia’s Energy Sector in Final Weeks of Presidency – WP

U.S. President Joe Biden is considering imposing fresh sanctions on Russia’s energy sector during the closing weeks of his presidency, The Washington Post reported on Sunday, citing four sources. The potential measures have been described by the newspaper as a “farewell blow to Putin’s war chest.”

According to the sources, the new sanctions could target Russia’s so-called shadow fleet—an array of international ships used to transport Russian oil while evading existing restrictions. Additionally, measures may extend to previously unsanctioned Russian oil exporters and revoke licenses allowing banks to process payments for Russian energy transactions.

One senior U.S. official noted that these sanctions would provide President-elect Donald Trump’s administration with greater leverage in negotiations with Russian President Vladimir Putin to end the ongoing war in Ukraine. The official added that the measures would aim to place Ukraine in “the best possible position” to defend itself and negotiate peace on “fair terms.”

The potential move comes after Bloomberg reported on December 11 that the Biden administration was exploring sanctions specifically targeting Russia’s oil trade, including export restrictions on certain types of crude and penalties against the shadow fleet involved in transporting it.

Since Russia’s full-scale invasion of Ukraine in February 2022, the U.S. has imposed sanctions on Russian banks, defense firms, industrial enterprises, and other entities. However, the energy sector has faced only partial restrictions. The Biden administration has been cautious, fearing that severe curbs on Russian energy exports could trigger a sharp rise in global oil prices and domestic gasoline costs.

The Washington Post noted that Biden may remain wary of actions that could push up fuel prices in the U.S., potentially undermining his effort to hand over a strong economy to his successor.

Russia’s reliance on oil and gas sales accounts for an estimated one-third to one-half of its state budget revenue, according to the report. In 2023, Russia earned approximately $100 billion from energy exports, U.S. financial services company S&P Global stated in a January 2024 report.

Meanwhile, the European Union announced its 15th sanctions package against Russia on December 16, imposing restrictions on shipping firms linked to the shadow fleet and blacklisting 52 tankers from third countries that had transported Russian oil.

As Biden weighs his options, any final decision on sanctions could have far-reaching implications for global energy markets and the geopolitical landscape.