The Biden administration is preparing a new round of sanctions targeting tankers involved in transporting Russian oil, aiming to further reduce Moscow’s oil revenue and its capacity to finance the ongoing war in Ukraine.
Focus on Price Cap Violations
The proposed measures are directed at tankers carrying Russian crude sold above the $60-per-barrel price cap imposed by Western nations. Sources cited by Reuters indicate that Russia has been relying on a “shadow fleet” of older vessels to circumvent these restrictions. Many of these ships, deemed less safe by maritime experts, pose significant environmental risks due to their heightened potential for oil spills.
The sanctions are expected to include a broad package of measures targeting ships within this shadow fleet, as well as individuals involved in trading oil at prices exceeding the cap. One source described the upcoming sanctions as “a major package.”
Economic and Strategic Implications
Since Russia’s invasion of Ukraine in February 2022, the United States has imposed sanctions on dozens of vessels believed to be part of this clandestine fleet. This action is part of a broader strategy to cut off critical revenue streams that finance Moscow’s war efforts. Experts estimate the shadow fleet comprises hundreds of ships, many of which operate under opaque ownership structures designed to evade detection.
Timing Amid Political Transition
The timing of these sanctions is notable as the Biden administration seeks to solidify its support for Ukraine ahead of the transition to a new administration on 20 January, when President-elect Donald Trump is set to take office. Trump, a Republican, has frequently criticised the costs of U.S. support for Ukraine, raising uncertainty about how his administration will approach sanctions against Russia.
Potential Expansion to Other Actors
In December, U.S. Treasury Secretary Janet Yellen hinted at the possibility of additional sanctions against tankers and suggested that Chinese banks could also face penalties if found to be facilitating Russian oil sales. Such measures would represent an escalation in the Biden administration’s efforts to disrupt Russia’s access to foreign markets and reduce its oil income, which remains a critical source of funding for its military operations.
Broader Geopolitical Stakes
The new sanctions aim to address gaps in enforcement of the existing price cap, which has reportedly been undermined by countries and entities continuing to purchase Russian oil at elevated prices. This step aligns with broader Western efforts to pressure Moscow economically while limiting global energy market disruptions.
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