U.S. Hits Russian Oil Fleet With Sanctions, Targeting Gazprom Neft, Surgutneftegas and More

The United States Friday announced its largest sanctions yet on Russia’s energy sector targeting oil and LNG exports, aiming to cost Moscow billions monthly that Biden administration officials said will limit money available for the Kremlin's war in Ukraine, and giving Kyiv more leverage for negotiations, TURAN's Washington correspondent reports.

Today's sanctions target "Gazprom Neft" and "Surgutneftegas," two of Russia’s largest oil and gas companies, as well as 183 Russian boats known as Russia’s “shadow fleet”.

In addition, dozens of Russian energy officials and energy traders, including senior officials from "Rosatom", Russia's atomic energy corporation will be sanctioned.

Also targeted are entities and individuals involved in Russia’s LNG exports, those attempting to expand future Russian oil capacity, and officials in metals and mining sectors.
 
These sanctions align with G7 commitments and are timed due to improved global oil markets and reduced inflation, senior Biden administration officials told reporters on call Friday morning.

"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," U.S. Treasury Secretary Janet Yellen said in a statement.

According to officials, the UK is also taking action today, joining the U.S. in sanctioning two major Russian oil producers.  

As for the implications of today's sanctions, administration officials went on to explain doing business with the oil and gas companies by using dollars will not be permitted, making it harder for countries to purchase Russian exports. Moscow will have to build a new shadow fleet. The financial ecosystem Russia uses for the oil trade will be degraded after today's sanctions.

When asked about the timing of today's measures, the officials said that “Oil markets and the US economy are in a fundamentally better place.”

“If we had taken the moves earlier, then prices would have gone up, allowing Russian revenue to grow,” the officials said.  Now, forecasters expect supply to exceed demand. And since U.S. inflation is back down toward 2%, that allows Americans to absorb any increase in the price of gas.