US Ramps Up Pressure on Russia With Fresh Energy Sanctions

The Biden administration has announced a new round of sanctions targeting Russia's energy sector, aiming to further isolate Moscow for its ongoing war in Ukraine. The sanctions, unveiled on January 10, 2025, are the most significant to date and are expected to have a substantial impact on Russia's energy exports and revenue.



The new sanctions block two major Russian oil producers, Gazprom Neft and Surgutneftegas, and dozens of their subsidiaries. Additionally, more than 180 oil-carrying vessels suspected of being part of a "shadow fleet" used to evade sanctions are targeted. These vessels are also suspected of shipping sanctioned Iranian oil. The sanctions are expected to disrupt oil trade and financial facilitation in support of Russia's oil exports, making it more difficult and costly for Russia to export its oil and gas.

The sanctions also prohibit the provision of U.S. petroleum services to persons located in the Russian Federation, cutting off Russia's access to U.S. services related to the extraction and production of crude oil and other petroleum products. This is expected to further reduce Russia's energy exports and revenue.

The U.S. Department of State is also taking steps to reduce Russia's energy revenues by blocking two active liquefied natural gas projects, a large Russian oil project, and third-country entities supporting Russia's energy exports. The State Department is also designating numerous Russia-based oilfield service providers and senior officials of State Atomic Energy Corporation Rosatom.

The sanctions are part of a broader effort by the U.S. and its allies to reduce Russian revenues from energy and other commodities. The U.S. Department of the Treasury issued a new determination pursuant to Executive Order (E.O.) 14024 that authorizes the imposition of sanctions on any person determined to operate or have operated in the energy sector of the Russian Federation economy. This new determination strengthens the ability of Treasury and State to target revenue generated from the export of oil that Russia uses to fund its war against Ukraine and other harmful foreign activities.



The sanctions are expected to have a significant impact on Russia's energy exports and revenue, potentially leading to economic instability and a decline in overall output. However, the full extent of the impact will depend on Russia's ability to adapt to these sanctions and find alternative markets for its energy exports.

In conclusion, the new sanctions announced by the Biden administration are a significant escalation in the U.S. and its allies' efforts to isolate Russia and reduce its energy revenues. The sanctions target key energy producers, disrupt oil trade and financial facilitation, and prohibit U.S. petroleum services, all of which are expected to have a substantial impact on Russia's energy exports and revenue. The sanctions are part of a broader effort to reduce Russian revenues from energy and other commodities, aiming to inflict pain on Moscow for its war in Ukraine.