US imposes toughest sanctions yet on Russia’s oil industry

The US took its strongest actions yet to slash Russian oil and gas revenues by sanctioning two oil companies, about 180 oil-carrying vessels, dozens of traders, insurance companies and some senior energy officials.

The moves, announced Jan. 10, 2025, by the Treasury Department and State Department, intensify recent actions by the Biden administration to put pressure on Russia and boost aid to Ukraine before President-elect Donald Trump takes office.

The State Department said it was sanctioning nearly 80 entities and individuals, including those engaged in the active production and export of LNG from Russia. Others include those attempting to expand Russia’s oil production capacity; those providing support to the US-sanctioned Arctic LNG 2 project; those involved in Russia’s metals and mining sector; and senior officials of State Atomic Energy Corporation Rosatom.

Treasury is concurrently sanctioning more than 150 entities and individuals, including major Russian oil producers Gazprom Neft and Surgutneftegas, and Russian insurance companies. The sanctions also prohibit Russia’s use of US petroleum services related to the extraction and production of crude oil and other petroleum products, effective Feb. 27, 2025.

'Racheting up sanctions risk'

“The United States is taking sweeping action against Russia’s key source of revenue for funding its brutal and illegal war against Ukraine,” said Secretary of the Treasury Janet Yellen. “This action builds on, and strengthens our focus since the beginning of the war on disrupting the Kremlin’s energy revenues, including through the G7+ price cap launched in 2022 (OGJ Online, Sept. 2, 2022). With today’s actions, 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.”

The UK joined Treasury in sanctioning Gazprom Neft and Surgutneftegas, Treasury added.
Most of the vessels sanctioned are oil tankers that are part of Russia’s “shadow fleet” that has skirted existing international sanctions on Russia, while the sanctioned executives include Gazprom Neft CEO Aleksandr Valeryevich Dyukov, Treasury said.