WASHINGTON/NEW DELHI/LONDON (Reuters) – The U.S. President Joe Biden’s administration imposed its broadest package of sanctions so far targeting Russia’s oil and gas revenues on Friday, in an effort to give Kyiv and Donald Trump’s incoming team leverage to reach a deal for peace in Ukraine.
The move is meant to cut Russia’s revenues for continuing the war in Ukraine that has killed more than 12,300 civilians and reduced cities to rubble since Moscow invaded in February, 2022. Ukrainian President Volodymyr Zelenskiy said the measures will “deliver a significant blow” to Moscow.
The U.S. Treasury imposed sanctions on Gazprom Neft and Surgutneftegas, which explore for, produce and sell oil, as well as 183 vessels that have shipped Russian oil, many of which are in the so-called shadow fleet of aging tankers operated by non-Western companies. The sanctions also include networks that trade the petroleum.
The Treasury also rescinded a provision that had exempted the intermediation of energy payments from sanctions on Russian banks. The sanctions should cost Russia billions of dollars per month if sufficiently enforced.
Gazprom Neft said the sanctions were unjustified and illegitimate and it will continue to operate. The measures allow a wind-down period until March 12 for sanctioned entities to finish energy transactions.
The sanctions are part of a broader effort, as the Biden administration has furnished Ukraine with $64 billion in military aid since the invasion, including $500 million this week for air defense missiles and support equipment for fighter jets.
The Biden administration believes that the sanctions will aggravate pressures on the Russian economy that have already pushed up inflation to almost 10% and reinforce a bleak economic outlook for 2025 and beyond.
One of the Biden officials said it was “entirely” up to the President-elect Trump, a Republican, who takes office on Jan. 20, when and on what terms he might lift sanctions imposed during the Biden era.