“The United States is taking sweeping action against a key revenue source from Russia’s brutal and illegal war in Ukraine. They reinforce our concern, since the start of the conflict, to disrupt the Kremlin’s revenues from this sector, in particular with the establishment of a price ceiling”, underlined the outgoing Treasury Secretary, Janet Yellen, quoted in the press release.
Beyond producers and vessels, they also target the entire sector, targeting in particular a certain number of intermediaries, service providers in the oil fields as well as political leaders in the sector. The sanctions are taken in cooperation with the United Kingdom, the American government said.
Sanctions, particularly concerning the 200 ships presented as being “unprecedented” by an American official, during an exchange with the press, who clarified that they also concerned “dozens of brokers”. “If these measures are fully implemented, they will weaken Russia’s revenues and cost it several billion dollars per month,” he added.
They also involve prohibiting the provision of services offered by American companies specializing in the petroleum sector to the targeted companies, in particular in assistance with the extraction and production of petroleum products.
Negotiation leverage
A ban which will come into force on January 27, said the Treasury Department. More broadly, the United States gives itself the possibility of “imposing sanctions on any person who wishes to operate or has operated in the Russian energy sector”, according to the ministry press release. These sanctions are in addition to the many already in place, including the introduction of a capped price for Russian oil, implemented in December 2022.
-Washington announced on November 21 a series of restrictions targeting around fifty Russian banking establishments, including Gazprom’s financial subsidiary, Gazprombank, in order to already reduce revenues from the sale of hydrocarbons. Asked about the fate of these sanctions under the next government, the senior official considered that it was “totally up to him to decide if, when and under what conditions he could lift the sanctions that we have put in place”.
He added immediately that these measures would provide – by weakening Moscow – “significant leverage” to both the Trump administration and Ukraine “to negotiate a just and lasting peace”. He also affirmed that the American economy was now able to resist the inflationary risk of such sanctions, thanks to a form of “abundance” in terms of energy supply in the country.
Conversely, Washington hopes that the sanctions will further weaken the Russian economy “where inflation has already climbed to almost 10%”. The sanctions result in the freezing of assets held directly or indirectly by the targeted companies in the United States as well as the ban on companies based in the United States, or American citizens, from trading with these sanctions targets, at the risk of be sanctioned in turn.
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