Washington intensifies sanctions against Russia’s energy sector

The Joe Biden administration has imposed strict sanctions against 183 vessels and several Russian oil and tanker companies as it wraps up its final days in office.  

PHOTO: Getty Images

In a bid to further restrict Russia’s major revenue sources, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned major Russian oil companies including Gazprom Neft and Surgutneftegas, as well as around 183 oil tankers, dozens of oil traders and oilfield service providers.

Oil prices have moved higher following the announcement of sanctions, as the news supported growing concerns about tight crude supplies in the global oil market in 2025, according to analysts.

“These latest sanctions have the potential to erase the surplus we expect for the oil market this year,” two analysts from ING Bank noted.

OFAC has sanctioned more than two dozen Gazprom Neft and Surgutneftegas subsidiaries, it said. The UK government has also joined the US treasury in sanctioning these companies, it added.

The sanctions imposed on oil-carrying vessels are mainly to restrict Russia's use of its “shadow fleet,” the US treasury department noted. A shadow fleet or a “dark fleet” primarily consists of older and environmentally hazardous vessels that intentionally evade regulations. Shadow fleet owners are infamous for the covert practice of forging documents to avoid industry standards.

“The Russian shadow fleet ships [contribute to] a little more than 80% of Russian seaborne crude oil exports,” the analysts from ING Bank remarked. “While the true size of the shadow fleet is unknown, there are estimates that it could be as many as 600 tankers,” they added.

OFAC has argued that out of the 183 vessels added to the sanctions list, several tankers have not only carried Russian oil but also sanctioned Iranian oil.

Additionally, the US Department of State has blocked Russia's two active liquefied natural gas projects and more than 30 Russian oilfield services providers. The US treasury department has also prohibited US petroleum service companies from operating in Russia. This prohibition takes effect from 27 February 2025.

By Aparupa Mazumder

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