US considers new sanctions on Russian oil to weaken Kremlin before Trump presidency
Russia's oil trade ships. (AFP Photo)
The Biden administration is considering new measures to restrict Russia‘s oil trade, aiming to undercut the Kremlin’s finances before President-elect Donald Trump takes office.
Sources familiar with the deliberations revealed to Bloomberg that potential sanctions could include restrictions on Russian crude exports and penalties for foreign buyers, marking a significant escalation in U.S. efforts to pressure Moscow.
Shift in US policy toward Russian oil exports
Previous U.S. sanctions, including a price cap on Russian oil, had limited impact on curbing Moscow’s revenues. The new measures under consideration would build on these efforts by targeting foreign buyers and the so-called shadow fleet of tankers that transport Russian oil.
Key considerations include:
- Potential sanctions on buyers of Russian oil, modeled after restrictions on Iranian oil exports.
- Targeting tanker fleets involved in shipping Russian crude.
- Collaborating with the European Union, which plans similar sanctions by year-end.
Officials suggest these steps could leverage current low oil prices, minimizing the global economic fallout.
Timing critical ahead of Trump administration
The Biden administration’s move comes as oil prices remain stable, with Brent crude trading below $75 per barrel. This strategic window allows for tighter sanctions without causing significant market disruptions.
The timing also reflects concerns about Trump’s potential policy shifts. As president-elect, Trump has expressed interest in pushing for negotiations to end the nearly three-year conflict in Ukraine, which some fear could lead to concessions to Moscow.
Potential risks and global implications
While the proposed sanctions aim to reduce Russia’s war finances, they come with risks:
- Market volatility: Stricter measures could spike oil prices, impacting the global economy.
- Diplomatic tensions: Countries like India and China, major buyers of Russian crude, may resist U.S. pressure.
- Energy security: Nations dependent on Russian energy, including Hungary and Türkiye, have voiced concerns about further restrictions.
