US imposes sweeping range of sanctions on Russian energy sector

The U.S. Treasury Department on Jan. 10 imposed restrictive measures on more than 180 vessels, oil companies and traders, and insurance providers to further reduce Russian revenues from energy exports. 

Some 30 Russian energy giants such as, Gazprom Neft, Rosatom, Surgutneftegas, Ingosstrakh, AlfaStrakhovanie, and Sovcomflot were among 30 energy market players slapped with sanctions.

These measures also extend to leaders and representatives of the affected organizations, according to the U.S. Treasury Department’s press office.

“The Department of State is also taking steps to reduce Russia’s energy revenues by blocking two active liquefied natural gas projects, a large Russian oil project, and third-country entities supporting Russia’s energy exports,” the statement said.

Unprecedented in scope, sanctions also were imposed on more than 183 tankers, including those from Russia’s “shadow fleet,” used for transporting oil. The restrictions also target companies involved in maritime insurance.

“Today’s actions also impose sanctions on an unprecedented number of oil-carrying vessels, many of which are part of the ‘shadow fleet,’ opaque traders of Russian oil, Russia-based oilfield service providers, and Russian energy officials,” the U.S. Treasury added.

Since Feb. 27, American companies have been prohibited from offering oilfield services in Russia. This includes restrictions on the export or re-export of these services, even if sold through intermediaries, to individuals in Russia.

“The United States is taking sweeping action against Russia’s key source of revenue for funding its brutal and illegal war against Ukraine,” said Treasury Secretary Janet Yellen.

The new round of sanctions also target Rosatom, including 14 members of its board of directors.

Additionally, steps were taken to reduce revenue derived from two active liquified natural gas (LNG) projects, a large Russian oil project, and third-party entities that support Russia’s energy, the Treasury news release added. 

Russia currently operates five LNG projects: Yamal LNG, Sakhalin-II, Cryogas-Vystok, Portovaya LNG, and Arctic LNG 2, according to Captain, a media outlet that reports on oil and gas news. 

Russian oil and gas revenues have accounted for a third and up to half of federal budget proceeds over the past decade, according to Reuters analysis. Last year, oil and gas sales surged 26 percent to $108 billion.