The US has imposed its strongest sanctions yet on Russia in a bid to target Moscow’s energy revenue that is currently powering its war efforts in Ukraine. The new measures will focus on more than 200 entities and people that range from traders and officials to insurance companies, as well as hundreds of oil tankers. The UK has also joined the US for the first time since Moscow’s invasion of Ukraine by directly targeting energy firms Gazprom Neft and Surgutneftegas.
“The move to take on Russian oil companies will drain Russia’s war chest – and every ruble we take from Putin’s hands assists in saving Ukrainian lives,” commented Foreign Secretary David Lammy. The measures announced by the US Treasury on Friday will also be legislated, forcing the Trump administration to involve Congress if they want to lift them in the future.
As well as this, Washington will also limit the number of people who are legally allowed to purchase Russian energy and clamp down on what it’s calling Moscow’s “shadow fleet” of vessels that are shipping oil around the globe. The actions carried out by the US Treasury Secretary have ratcheted up the sanctions risk that’s been linked to Russia’s oil trade. This focuses on both shipping and financial facilitation that supports Russia’s oil exports.
President Joe Biden believes that Russian leader Vladimir Putin is in “tough shape” and that it’s essential that he has no breathing space if he continues to conduct the “god-awful things” that he is currently responsible for. Ukraine’s president, Volodymyr Zelensky has thanked the US for its “bipartisan support”.
Oil has had a price cap placed on it since the beginning of the war in Ukraine, which forms part of the key measures for curtailing Russia’s energy exports. However, it’s believed that its effectiveness was diluted since the market was trying to avoid a drop in the volume of Russian oil. This was due to worries that it would impact the global economy. Daniel Fried, a distinguished fellow at the Atlantic Council, explains that US oil production and exports are on the rise, which means the price effect of taking Russian oil off the market, which is the goal of the newest sanctions, will be less severe. John Herbst, a previous US ambassador to Ukraine, commented that while the steps are “excellent”, implementing them will be critical. It’s up to the Trump administration to determine if putting pressure on the Russian economy will be successful
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