President Joe Biden‘s administration is slapping new sanctions on Russia’s lucrative oil and energy sector, in a move meant to deprive Moscow of cash that will force Donald Trump decide whether to maintain or relax pressure.
‘The objective is to change Putin’s calculus about the costs of continuing a senseless war,’ said a senior administration official who described the new wave of sanctions designations. ‘Our sanctions are like pounds of sand into the gears of Russia’s war machine,’ boasted the official.
The move comes just days before Biden leaves office. Officials said the delay until after the November elections was about changes in the oil market, not domestic politics.
There is ‘not a step in the production and distribution chain that’s untouched. Evasion is going to be even more costly for Russia,’ said an administration official.
The administration predicts the moves will hike Russia’s costs to the tune of billions of dollars each month, although Moscow has become adept at trying to evade existing sanctions.
Also getting targeted are 183 vessels that make up Russia’s ‘shadow fleet,’ allowing it to ship its oil products around the globe to raise revenue despite existing sanctions. The aim is to push them to find alternative means, and drive up costs in the process.
All are owned by Russia-based fleet runners. Some of them also have shipped sanctioned Iranian oil, according to the feds. A UAE-based firm and several Barbados-flagged vessels are also being targeted.
According to an analysis by the European Parliament, Russia uses ‘flags of convenience’ and intricate ownership structures in its shadow fleet to conceal ownership, sometimes swapping cargo between ships, blocking out automatic identifcation systems, and sending out fake data, posing a variety of risks.
NATO has even dispatched a fleet of ten ships to the Baltic to protect Europe’s crucial undersea cables after a spate of sabotage attacks.
The sanctions also target major Russia major firms including Gazprom Neft, a subsidiary of Gazprom. The other is Surgutneftegas, a Russia-based company invovled in oil exploration, production, and sales. The UK is also sanctioning the two firms.
The U.S. and allies slapped a raft of sanctions on Russia after its 2022 invasion of Ukraine, in a move meant to grind down its economy and increase the cost of continuing the war.
Although Russia has experienced high inflation and high interest rates, it has been able to adapt its economy to a wartime one, while finding ways to acquire or build its own weapons through evasion of controls.
The new designations, under authority after Russia’s invasion of Crimea, require the succeeding administration to inform Congress if it wants to reverse them. That would give lawmakers the chance to vote to disapprove of the decision.
‘So ultimately, the administration will have to make a decision about what they want to do, but we think that by taking these actions, it puts them in a better position to help find just and sustainable peace,’ said the official.
The new sanctions designations come just a day after the administration announced it is giving another $500 million in security aid to bolster Ukraine’s military arsenal in the final days before he leaves office amid uncertainty about the prospect or possibility of negotiations with Russia.
Biden’s defense secretary warned of dire consequences if Russia is able to swallow the nation – and Ukrainian President Zelensky says it would be ‘crazy’ to squander the alliance leaders assembled to protect it.
‘We´ve come such a long way that it would honestly be crazy to drop the ball now and not keep building on the defense coalitions we´ve created,’ Zelenskyy said Thursday. ‘No matter what´s going on in the world, everyone wants to feel sure that their country will not just be erased of the map.’
The announcement of security aid came after Defense Secretary Lloyd Austin met Zelensky as he tries to bolster Ukraine’s economy and defenses before handing over power to Donald Trump.
The security assistance comes from U.S. weapons stockpiles, as Austin met with Zelensky at Ramstein Air Base in Germany, after huddling with a defense group, in just the latest move meant to strengthen Ukraine.
‘Our focus will be on maintaining momentum, delivering results, and sending a clear message: The international community stands resolute in its support for Ukraine,’ Austin told reporters.
He repeated a Biden administration refrain that the security of the U.S. and its allies is impacted by what happens in Ukraine. ‘If Putin swallows Ukraine, his appetite will only grow,’ Austin said of Russian President Vladimir Putin.
There had been plans for a final meeting between Biden and Zelensky during the president’s trip to Rome, but the White House announced Wednesday night that it was cancelling Biden’s trip as he contended with the massive wildfires in Los Angeles.
It was to be another symbolic effort meant to bolster the Ukrainian president, who is facing new pressure by the incoming administration to reach a negotiated settlement three years after Russia invaded.
Since the brutal invasion began, the administration has pushed out $65 billion in security assistance, with the Biden camp pushing to get every appropriated dollar out the door before they turn over the keys to Trump, whose associates have issued a series of comments indicating Kiev should make a deal.
Combined, the 50-nation group has given more than $120 billion to Ukraine.
New sanctions are also on the to try to further hamstring the Russian economy, with inflation there running about 9 percent and interest rates climbing.
Trump issued yet another comment at his Tuesday press conference at Mar-a-Lago that expressed an appreciation for Russia’s position – describing Moscow‘s fears of NATO expansion even though the Biden administration resisted Kiev’s calls for outright membership in the military alliance.
‘A big part of the problem is, Russia – for many, many years, long before Putin – said, ‘You could never have NATO involved with Ukraine.’ Now, they’ve said that. That’s been, like, written in stone,’ Trump said. ‘And somewhere along the line Biden said, ‘No. They should be able to join NATO.’ Well, then Russia has somebody right on their doorstep, and I could understand their feelings about that,’ Trump said.
The Biden administration believes it has helped put Ukraine in a much stronger position, stressing that only Ukraine can decide when it is in its best interest to negotiate.
The goal has been to strengthen Ukraine’s position, on the belief that 2025 or some future period could be ripe for negotiation. It has come in the formers of thousands of rockets and artillery rounds, plus $50 billion in economic aid loans derived from interest on seized Russian assets. ($20 billion coming from the U.S.).
A U.S. official said Ukraine has healthy weapons stockpiles, and the administration has met its needs at every stage, including by bolstering air defenses amid Russia’s repeat attacks on Ukrainian cities and infrastructure.
There is about $4 billion left in appropriated funding for Ukraine left, an amount the administration is expected to expend. A December package provided $1.25 billion, in yet another effort to bolster Ukraine amid its uncertain future.
But the official said it was hard to predict whether either the Russians or Ukrainians were ready for talks in the short-term, although the topic is getting more discussion on both sides.
The handover comes at a time when Ukraine has been suffering some battlefield losses to Russian invaders in the east. A Ukrainian offensive into Russia’s Kursk region stunned Moscow, and has managed to hold some territory, while North Korean forces brought in to bolster Russia’s counterattack have suffered heavy losses.
The U.S. believes Russia has taken on the order of 600,000 casualties, included those killed or wounded, suffering about 1,500 casualties per day to experience relatively minor gains.
Although some U.S. officials were critical of the tactic when Ukraine launched a surprise counterattack into the Kursk region at risk of weakening its own defenses, the troops have been able to hold terrain, aided by U.S. equipment.
Zelensky says 15,000 Russian soldiers have been killed trying to push them out.
‘During the Kursk operation, the enemy has already lost 38,000 of their soldiers in this direction alone, with nearly 15,000 of these losses being irreversible,’ Zelensky he told the country, in figures that could not be verified.
