US is preparing to impose additional sanctions on tankers transporting Russian oil, according to sources

The Biden administration is preparing to implement additional sanctions on Russia in response to its ongoing conflict in Ukraine, specifically targeting the nation’s oil revenue by focusing on tankers transporting Russian crude, according to three informed sources.

As President Joe Biden’s administration aims to strengthen support for Ukraine ahead of President-elect Donald Trump’s inauguration on January 20, there is concern regarding Trump’s previous criticisms of U.S. financial assistance to Ukraine.

“This is a significant package, including two Russian oil companies, over 100 tankers, oil traders, and Russian insurance firms,” one official stated, although the specific entities were not disclosed.

The future stance of Trump regarding sanctions on Russia remains uncertain. The Biden administration intends to impose sanctions on tankers transporting Russian oil sold above the Western price cap of $60 per barrel, the sources indicated.

Despite being sold above the price cap, Russian crude has generally been offered at a discount compared to the broader market, with China and India showing a willingness to purchase these supplies. The U.S. administration has notified India’s foreign ministry about the impending sanctions, as noted by the first official, highlighting that the current oversupply of oil and low prices could assist India in fulfilling its crude oil needs.

A second source indicated that the upcoming sanctions are expected to focus on individuals linked to networks that are trading oil above the established price cap. To circumvent this cap, Russia has employed a so-called shadow fleet consisting of older vessels, which shipping experts warn are often less safe and more likely to cause oil spills.

Since Russia’s invasion of Ukraine in February 2022, the United States has imposed sanctions on numerous ships from a fleet that is believed to number in the hundreds, aiming to diminish Moscow’s capacity to finance its military actions.

U.S. Treasury Secretary Janet Yellen informed Reuters last month that the U.S. is considering additional sanctions targeting tankers and has not excluded the possibility of sanctioning Chinese banks in an effort to curtail Russia’s oil revenue and its access to international supplies.

The Treasury’s Office of Foreign Assets Control did not provide an immediate response to a request for comment on Sunday. In late 2022, the G7, the EU, and Australia established a $60 price cap on Russian oil, prohibiting the use of Western maritime services, including transport, insurance, and financing for oil shipments priced at or above this cap.

Last month, the British government imposed sanctions on 20 ships and two trading companies for their alleged involvement in the Russian oil trade. Russia ranks among the top three oil-producing nations globally.