The United States and the United Kingdom announced this Friday additional sanctions against Russia’s oil and liquefied gas sectordescribed by senior US officials as the “most significant” imposed on the Russian energy sector since the start of the war in Ukraine.
The objective of these measures is cut income that finance the “Kremlin war machine” and could cost the Russian economy billions of dollars a month, a US official explained in a press call.
Although the Government of Joe Biden has adopted these sanctions, could be revoked by Donald Trump when he assumes the Presidency on January 20. Specifically, the United States, in coordination with the United Kingdom, sanctioned two of Russia’s largest oil producers and exporters: Gazprom Neft, the country’s third largest oil company, and Surgutneftegas, another prominent company in the energy sector.
According to the British Government, these companies jointly produce more than a million barrels per dayvalued at about $23 billion annually at current prices, an amount that exceeds Jamaica’s GDP. Washington and London consider that the profits of these companies serve to finance the war in Ukraine.
Furthermore, the United States sanctioned more than two dozen subsidiaries of Gazprom Neft and Surgutneftegas, as well as 183 Russian oil-carrying ships that, according to US officials, are part of a “shadow” fleet to sell Russian crude oil while evading Western sanctions.
The United States also hit 200 entities and individuals allegedly linked to the Russian energy sector with sanctions, including 80 related to the production and export of liquefied natural gas (LNG). Other sanctions aim to those seeking to expand oil production capacity of Russia, those involved in Novatek’s Arctic LNG 2 project and senior officials at Rosatom, the Russian state nuclear energy conglomerate, the Treasury Department detailed in a statement.
In a call with journalists, US officials detailed the reason behind these sanctions, which are in addition to those imposed by Washington and its allies after the Russian invasion of Ukraine. Specifically, in March 2022, a month after the start of the war, the United States banned the import of Russian oil, liquefied natural gas and coal. The European Union also restricted these purchases, dealing a severe blow to Moscow for its dependence on the European market.
However, Washington then decided not to impose broader sanctions due to tension in global oil markets, which could have caused a increase in prices of crude oil, explained a US official.
To mitigate that impact, in December 2022, the United States, along with the G7 and Australia, adopted a cap of 60 dollars per barrel for maritime exports of Russian oil, allowing purchases only below that limit. Now, with greater global supply thanks to increased production in other countries, Washington has decided to move forward with sanctions aimed at Russian energy giants, the aforementioned official added.
Before the official announcement of these measures, the price of oil in the United States had already gone up amid concerns about new restrictions in the global energy market, aggravated by the fires in California and bad weather in various regions of the country, which could close refineries and affect global supply.
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