The United States on Friday announced new sanctions targeting Russia’s energy sector and its “shadow fleet” of oil tankers, in what could be the latest attempt by the Biden administration to cripple the Russian economy in response to Moscow’s war in Ukraine.
President Biden was cautious in his approach to sanctions on Russia’s energy sector over concerns that shutting down its exports would cause gasoline prices to spike around the world. But U.S. officials said healthier global oil supplies and lower inflation presented an opportunity to put more pressure on Russia’s oil industry as the war approaches its fourth year.
Despite a coordinated effort by Western allies to economically punish Moscow for its actions, the Russian economy has avoided the collapse that many economists predicted.
The Biden administration’s moves will put the onus on the Trump administration to decide whether to implement sanctions. Senior Biden administration officials declined when asked whether they had discussed the sanctions with President-elect Donald J. Trump’s transition team, but said they expected the measures to give the next administration additional leverage over Russia to negotiate an end to the war.
“The United States is taking sweeping action against Russia’s key source of revenue to finance its brutal and illegal war against Ukraine,” Treasury Secretary Janet L. Yellen said in a statement. “With today’s sanctions, we increase the sanctions risk associated with Russian oil trade, including shipping and financial facilities to support Russian oil exports.”
Oil prices jumped on Friday ahead of the announcement of the sanctions on concerns that the new restrictions, along with bad weather in the United States and wildfires in California, could limit global energy supplies.
The new sanctions target more than 180 vessels from Russia’s shadow tanker fleet that Moscow has used to evade existing oil sanctions. Also on the blacklist are two leading Russian oil producers, Gazprom Neft and Surgutneftegas, and their subsidiaries.
The sanctions target Russian liquefied natural gas projects, Russian energy officials and service providers that support the country’s energy industry. And they are limiting some of the exemptions that have been in place to allow banks to continue facilitating Russian energy transactions.
US sanctions can essentially cut off a person or company from the Western financial system.
The Biden administration said it would significantly undermine Russia’s oil revenues and cost the Russian economy billions of dollars a month. The senior officials, speaking on condition of anonymity to discuss the administration’s thinking, described the sanctions package as the most significant yet for Russia’s energy sector.
Since the beginning of the war, Mr. Biden was cautious in shaking up global oil markets while inflation was on the rise. In 2022, the Group of 7 nations created an oil “price ceiling” that was meant to limit how much Russia could earn from the oil it exports. Over time, the effectiveness of that strategy weakened as Russia developed measures, such as its shadow fleet of aging tankers, circumvent sanctions.
However, with inflation under control and the presidential election looming, the administration has taken a more aggressive approach to Russia in its final months.
In late November, the Ministry of Finance imposed sanctions on Russia’s Gazprombank, a large financial institution that is a conduit for Russian payments for energy and the purchase of military equipment used by Moscow in Ukraine.
Last month, the United States transferred $20 billion to Ukraine in the form of a loan that will be repaid using interest earned on frozen Russian central bank assets.
Although the Russian economy has proven resilient, it remains under pressure.
High inflation prompted the country’s central bank to raise benchmark interest rates to 21 percent. Economic growth is slowing down, and there is a great shortage of products.
Russia’s economy is expected to grow 1.3 percent next year, according to the International Monetary Fund, down from 3.6 percent in 2024. Russia’s annual inflation rate was nearly 10 percent in 2024, with prices of many basic food products twice or three times more than the total figure.
The national currency, the ruble, fell in November to its lowest level since the start of the war, reducing Russia’s purchasing power.
The effectiveness of the latest round of U.S. sanctions will ultimately be determined by the Trump administration, which will be responsible for their implementation and could potentially overturn them.
Mr. Trump has indicated that he wants to broker a deal with Russia and Ukraine to end the war. Although Mr. Trump has used sanctions aggressively while in office, during his campaign last year he raised concerns about the impact sanctions could have on the dollar and its status as the world’s reserve currency.
“I use sanctions very heavily against countries that deserve it, and then I roll them back,” Mr Trump said at the Economic Club of New York in September, adding: “I want to use sanctions as little as possible.”