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US official: Washington aims to halve Russia's energy profits by 2030

by Martin Fornusek December 1, 2023 3:56 PM 2 min read
The Russian company Tatneft at work in an oil field in Tatarstan on June 4, 2023. (Alexander Manzyuk / Anadolu Agency via Getty Images)
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The U.S. seeks to cut Russia's oil and gas revenue by half by the end of the decade, the Financial Times reported on Dec. 1, citing U.S. Assistant Secretary of State for Energy Resources Geoffrey Pyatt.

The official, who previously served as an ambassador to Greece and Ukraine, said the U.S. sanctions must ensure that Russia can never again attack one of its neighbors.

"This is something that we're going to have to stick to for years to come, as long as Putin persists in this war," Pyatt commented.

Fossil fuel exports have traditionally made up an essential share of Russia's revenue. In spite of Western sanctions, Moscow's energy profits represented around 41.6% of the total budget proceeds in the first year of the war.

Since the start of the full-scale war, Russia has earned around $600 billion in fossil fuel exports, according to estimates by the Helsinki-based think tank Centre for Research on Energy and Clean Air.

The share of oil and gas sales in Russia's federal budget appears to be dropping, representing 28.3% of the total proceeds of 19.73 trillion rubles ($881 billion) between January and September 2023.

According to a forecast by the International Energy Agency, Russia's fossil fuel profits could drop by 40%-50% by 2030 if Western sanctions on Russia's energy industry are maintained.

"We're going to do everything we can to help make that true," Pyatt said.

"The goal of these sanctions is to change Russia's behavior and to ensure that (Russian President Vladimir) Putin is not in a position, whenever some kind of peace is achieved . . . to use three or four years to rearm and prepare himself and prepare his military for stage three of the Ukraine invasion," he added.

Sanctions imposed by the U.S. and its allies have included a ban on much of domestic Russian oil imports and a $60-per-barrell price cap on Russia's seaborne crude trading on global markets.

While Moscow largely managed to avoid the cap by using a so-called "ghost fleet" of tankers, Washington and Brussels said they are working on a mechanism to enforce the limit and punish the transgressors.

Bloomberg: Some EU members seek to weaken Russia sanctions enforcement plan
Some EU countries seek to weaken the bloc’s plans aimed against Russia’s ability to acquire restricted dual-use goods via third-party countries, Bloomberg reported on Nov. 25, citing undisclosed sources.

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