The United States on Friday announced new sanctions targeting Russia’s energy sector and its “shadow fleet” of oil tankers in what could be a final attempt by the Biden administration to cripple the Russian economy in response to Moscow’s war in Ukraine.
President Biden has been cautious in his approach to sanctions on Russia’s energy sector out of concern that shutting off its exports would send gasoline prices surging around the world. But U.S. officials said healthier global oil supplies and the easing of inflation presented an opportunity to exert 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 moves from the Biden administration will put the onus on the Trump administration to decide whether to enforce the sanctions. Senior Biden administration officials demurred when asked if the sanctions were discussed with President-elect Donald J. Trump’s transition team but said they expected the measures to provide the next administration with 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 for funding its brutal and illegal war against Ukraine,” Treasury Secretary Janet L. Yellen said in a statement. “With today’s sanctions, we are ratcheting up the sanctions risk associated with Russia’s oil trade, including shipping and financial facilitation in support of Russia’s oil exports.”
Oil prices jumped on Friday ahead of the announcement of the sanctions amid concerns that new restrictions, along with severe weather in the United States and wildfires California, could constrain global energy supplies.
The new sanctions target more than 180 vessels from Russia’s fleet of shadow tankers that Moscow has used to evade existing oil sanctions. They also blacklist two leading Russian oil producers, Gazprom Neft and Surgutneftegas, and their subsidiaries.
The sanctions take aim at Russian liquefied natural gas projects, Russian energy officials and providers of services that support the country’s energy industry. And they limit some of the exceptions that have been in place to allow banks to continue facilitating Russian energy transactions.
U.S. sanctions can essentially cut a person or company off from the Western financial system.
The Biden administration said this will substantially undermine Russia’s oil revenues and cost the Russian economy billions of dollars per month. Senior officials, speaking on the condition of anonymity to discuss the administration’s thinking, described the package of sanctions as the most significant to date on Russia’s energy sector.
Since the start of the war, Mr. Biden has wary of rattling global oil markets while inflation was soaring. In 2022, the Group of 7 nations created an oil “price cap” that was intended to limit how much revenue Russia could make from the oil it exports. Over time, the effectiveness of that strategy waned as Russia developed measures, such as its shadow fleet of aging tankers, to circumvent the sanctions.
However, with inflation under control and the presidential election over, the administration has been taking a more aggressive approach toward Russia in its final months.
In late November, the Treasury Department imposed sanctions on Russia’s Gazprombank, a major financial institution that is a conduit for Russian energy payments and the purchase of military equipment that Moscow uses 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 from Russia’s frozen central bank assets.
Although Russia’s economy has proved to be resilient, it remains under pressure.
High inflation has prompted the country’s central bank to raise benchmark interest rates to 21 percent. Economic growth is slowing, and shortages of products abound.
The Russian 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 the prices of many basic foodstuffs growing at double or triple that overall figure.
The national currency, the ruble, fell in November to its weakest 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 enforcing them and could potentially roll them back.
Mr. Trump has indicated that he wants to broker a deal with Russia and Ukraine to end the war. While Mr. Trump used sanctions aggressively while in office, he expressed concerns during his campaign last year about the impact that sanctions could have on the dollar and its status as the world’s reserve currency.
“I use sanctions very powerfully against countries that deserve it, and then I take them off,” Mr. Trump said at the Economic Club of New York in September, adding, “I want to use sanctions as little as possible.”
