US imposes toughest sanctions to date on Russian energy companies

The United States has imposed its toughest sanctions on Russian energy companies since the start of the war in Ukraine, the US Treasury Department announced on Friday.

As well as Russian oil giants Gazprom Neft and Surgutneftegas, the US Treasury said that dozens of oilfield service companies, including insurers, had been added to its Specially Designated Nationals and Blocked Persons List, along with some 183 foreign-registered oil tankers suspected of being part of the so-called shadow fleet used by Moscow to sell its oil and gas abroad despite international sanctions.

Greenpeace has said the Eventin, a stricken oil tanker currently adrift off the coast of Germany, forms part of that shadow fleet. While the ship’s ultimate owner is unknown, a UAE company affiliated with the Eventin has been under sanctions since 2022.

According to vessel-tracking service Marinetraffic, the Eventin, which sails under the flag of Panama, left the port of Ust-Luga in the Leningrad region in Russia’s northwest on 6 January, headed for Port Said in Egypt.

The main goal of the new restrictions is to block Russia’s revenue stream from its oil exports to China and India, Reuters reported, though the largest supplier of raw materials to both countries, Rosneft, has not been placed on the blacklist.

According to experts at macroeconomic statistics analysts MMI, while the new sanctions are unlikely to lead to an immediate collapse in Russia’s revenues from its energy exports, they would lead to a gradual decrease in production in the long term, which would in turn lead to a loss in export revenue that would stoke inflation.

The latest round of sanctions means that Surgutneftegas, whose cash reserves of over €50 billion have been referred to as “Putin’s money” and which holds much of its wealth in foreign banks in US dollars, will now be unable to access its overseas assets.