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Moscow on Saturday accused the United States of being ready to risk global energy instability with new sanctions on Russia’s energy sector, including industry majors such as Gazprom Neft, which were announced earlier on Friday.
The U.S. and the U.K. on Friday announced new sanctions against Russia’s energy sector, including oil giant Gazprom Neft, just days before President Joe Biden leaves office.
Russia’s Foreign Ministry said in a statement that on the eve of Biden’s “inglorious time in power,” Washington was trying to “cause at least some harm to Russia’s economy even at the cost of destabilizing world markets.”
“Of course, Washington’s hostile actions will not be left without reaction,” it added.
In reference to the California wildfires, Moscow accused Biden’s administration of leaving behind “scorched earth,” or total destruction, for incoming U.S. President Donald Trump since he cannot cancel the sanctions without Congress’s approval.
Kremlin spokesperson Dmitry Peskov earlier told reporters that the Biden administration was trying to leave Trump “as heavy a legacy as possible.”
The U.S. Treasury Department said Friday it was designating more than 180 ships and Russian oil majors Gazprom Neft and Surgutneftegas, fulfilling “the G-7 commitment to reduce Russian revenues from energy.”
At the same time, the U.K. government announced sanctions against the two companies, saying their profits were “lining (Russian President Vladimir) Putin’s war chest and facilitating the war” in Ukraine.
“Taking on Russian oil companies will drain Russia’s war chest, and every ruble we take from Putin’s hands helps save Ukrainian lives,” U.K. Foreign Secretary David Lammy said in a statement.
“Putin is in tough shape right now, and I think it’s really important that he not have any breathing room to continue to do the god-awful things he continues to do,” Biden told reporters Friday at the White House.
Gazprom Neft on Friday slammed the sanctions as “baseless” and “illegitimate,” Russian state news agencies reported.
“Gazprom Neft considers the decision to include its assets on the sanctions list as baseless, illegitimate and contrary to the principles of free competition,” Russian state news agencies quoted a company representative as saying.
Oil prices rose on the news, with a barrel of Brent North Sea crude oil for delivery in March up 3.6% at $79.68 at around 4:45 p.m. in Washington (21:45 GMT) on Friday.
When asked about gasoline prices, Biden conceded that they could rise “as much as three or four cents a gallon” but stressed that sanctions would have a “more profound impact” on Russia.
Most significant yet
Biden’s deputy national security advisor for international economics, Daleep Singh, called the sanctions “the most significant” yet on Russia’s energy sector, which he said was “by far the largest source of revenue for (President Vladimir) Putin’s war.”
On Saturday, the Russian ministry accused the U.S. of seeking to “hinder as far as possible or even make impossible any bilateral economic ties, including with U.S. business.”
It said Washington was “sacrificing to this the interests … of European allies,” which were “forced to switch over to more expensive and unreliable American supplies.”
It also accused Washington of “ignoring” the views of its own population on rising energy prices once the presidential election was over.
Sweeping action
Even before the sanctions were officially announced, rumors of fresh designations sparked condemnation from Peskov, who told reporters that the Biden administration was trying to leave Trump “as heavy a legacy as possible.”
In total, the U.S. announced sanctions against almost 400 people and entities.
These include 183 oil-carrying vessels, along with Russian oil traders and oilfield providers, the two Russian oil majors, and more than two dozen of their subsidiaries, according to the Treasury Department.
Serbia impacted
Serbian President Aleksandar Vucic announced plans to speak with Putin about the sanctions, which also affect the petroleum industry of Serbia (NIS), which is majority-owned by Russia’s Gazprom Neft and its parent company, Gazprom.
NIS is the only supplier of gas to Serbia and the majority owner of both gas pipelines that transport gas from Russia to households and industries in the country.
“Today, the U.S. imposed the most significant sanctions yet on Russia’s energy sector, by far the largest source of revenue for Putin’s war,” Singh, the Biden administration’s deputy national security advisor for international economics, said in a statement.
Senior administration officials told reporters the measures were designed to give the United States additional leverage to help broker a “just peace” between Ukraine and Russia.
Ukrainian President Volodymyr Zelenskyy praised the U.S. for introducing the sanctions.
“These measures deliver a significant blow to the financial foundation of Russia’s war machine by disrupting its entire supply chain,” he wrote in a post on the social media platform X.
Strong economy influenced the timing
Friday’s announcement comes just 10 days before Biden is due to step down, which puts President-elect Trump in something of an awkward position given his stated desire to end the Ukraine war on day one of his presidency.
Asked about the timing, National Security Council spokesperson John Kirby told reporters that oil markets were now in a “fundamentally” better place than they had been in the aftermath of Russia’s invasion of Ukraine in 2022 and that the U.S. economy was also faring better.
“We believe the moment was ripe right now to adjust our strategy,” he said.
LNG production, Rosatom
The U.S. State Department announced it was also taking action against Russia’s energy sector, “sanctioning nearly 80 entities and individuals, including those engaged in the active production and export of liquefied natural gas (LNG) from Russia.”
Among those it designated were people involved in Russia’s metals and mining sector “and senior officials of State Atomic Energy Corporation Rosatom.”
The move sparked condemnation from Rosatom, which called it “unreasonable and unlawful” in nature.
“The sanctions are perceived as an element of unfair competition on the part of unfriendly states,” Rosatom said in a statement published by several Russian news agencies.
