Outgoing U.S. President Joe Biden’s administration plans to introduce a "big package" of sanctions on Russia’s shadow fleet and individuals, Reuters reported on Jan. 6, citing sources familiar with the matter.
Despite Western efforts to reduce Russia’s income from oil funding its war against Ukraine, Moscow has been able to bypass sanctions and sell Russian oil above the imposed price cap of $60 per barrel with the buildup of a fleet of aging vessels with dubious ownership.
Washington’s planned sanctions would aim at tankers carrying Russian oil above the imposed price cap and individuals working in schemes to sell crude above the cap, Reuters reported.
"It is going to be a big package," one of the sources was quoted as saying by the news agency.
In a decision in late 2022, G7 countries, along with the EU and Australia, imposed rules on Western operators, permitting them to insure and transport Russian oil only if it is sold below the established threshold of $60 per barrel.
That prompted Russia to redirect its flows to China and India, countries willing to purchase the oil above the cap, using hundreds of old tankers that also pose a grave environmental risk. The U.S. only sanctions a handful of them, Reuters reported.
In a separate initiative, G7 countries discussed in late 2024 the possibility of lowering the price cap to $40 per barrel, but no consensus has been reached as projections show softening oil prices for 2025.
Ukraine has also targeted Russia's oil infrastructure through drone strikes, further disrupting production.
Several Russian refineries, including those in Tuapse, Ilyich, and Novoshakhtinsk, have reduced or suspended operations due to the combined impact of sanctions and Ukrainian attacks.
The sector has been forced to sell fuel at a discount and operate under high interest rates, adding strain to its operations.
Volodymyr Ivanyshyn
(Updated: )
