US tightens sanctions on Russia's oil sector and shadow fleet

The US administration has imposed the most extensive sanctions yet on Russia's oil industry, aimed at undermining its economic stability and supporting military operations. The measures target Russia's two largest oil companies, more than 180 vessels in the "shadow" fleet, as well as key insurers and traders involved in Russian oil exports.

Purpose of sanctions

As noted by US Treasury Secretary Janet Yellen, these measures are aimed at complicating logistics and financial transactions related to Russian oil. "Our sanctions increase the risks for those who support Russian oil exports, including transportation and financial simplifications," she said.

The sanctions are a continuation of previous restrictions imposed since 2022 after Russia's invasion of Ukraine and are aimed at undermining the economic resources that Russia uses for war.

Key targets of sanctions

The main targets were Gazprom Neft and Surgutneftegaz, companies that provide about 30% of Russia's seaborne oil exports. In the first 10 months of 2024 alone, they transported about 970,000 barrels of oil by sea daily. More than two dozen subsidiaries and Rosneft's transport division, Rosneftoflot, were also hit by sanctions.

In addition, the restrictions affected more than 180 tankers of the "shadow" fleet - vessels used to circumvent international sanctions. Previously, 135 tankers involved in opaque oil supply schemes were blacklisted.

Cooperation with allies

The sanctions were introduced in close coordination with the United Kingdom and the European Union. The joint efforts are aimed at further limiting Russia’s ability to circumvent restrictions and use oil export revenues to finance the war.

Political Outlook

Although the US administration will change after Donald Trump takes office, sanctions are unlikely to be lifted anytime soon. This is due to bipartisan support for Ukraine in the US, which makes such a move politically risky for the new administration.

Effects for the Russian Federation

The introduction of large-scale sanctions against the Russian oil sector puts significant pressure on the country’s economy. In addition to limiting access to international markets, it complicates financing logistics and insurance for oil transportation. In the long term, such restrictions could significantly undermine the competitiveness of the Russian oil industry.