Biden ready for tough sanctions on Russia before Trump returns – Bloomberg
11 December 10:15
The Biden administration is considering imposing new, harsher sanctions on Russia’s lucrative oil and gas industry in an effort to increase pressure on the Kremlin’s war machine weeks before Donald Trump returns to the White House. This was reported by Bloomberg, according to Komersant ukrainskyi.
The details of possible new measures are still being worked out, but President Joe Biden ‘s team is discussing the possibility of restrictions that could apply to some Russian oil supplies, according to sources familiar with the situation but anonymous due to the confidentiality of the discussions.
Biden has long postponed this decision due to concerns that it could lead to a sharp rise in energy prices, especially before last month’s presidential election. However, with oil prices falling amid a global glut and fears that Trump might try to force Ukraine into a quick deal with Russia, the Biden administration is now ready to take more aggressive action, the sources said.
These discussions show how the Biden team is becoming more willing to take risks in confronting Russia as it prepares for its departure, especially as previous attempts to limit the Kremlin’s energy revenues have yielded mixed results and the average price of gasoline in the United States has fallen to its lowest level since mid-2021. In recent weeks, the administration has also stepped up military and financial support for Ukraine due to questions about Trump’s willingness to continue US support.
The United States has already banned Russian oil imports, but new restrictions on the exports of one of the largest oil powers, which may apply to foreign buyers of Russian oil, will change the policy that has been in place since Russia’s full-scale invasion of Ukraine in February 2022.
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The administration is also considering new sanctions on the fleet of tankers used by Russia to transport oil. Restrictions on the so-called “shadow fleet” are expected to be announced in the coming weeks.
The European Union is also planning to take similar measures against Russia’s “shadow fleet” by the end of the year, and also plans to impose sanctions on those involved in this trade.
One of the possible scenarios for US sanctions could be the introduction of restrictions similar to those applied to Iranian oil, when oil buyers face penalties from the US. Such a move would be accompanied by high risks, as powerful countries such as India and China are major consumers of Russian oil.
First of all, it could lead to a rise in oil prices, which would put global economic pressure. Oil futures have been flat since October, with the international benchmark Brent trading below $75 per barrel, down from over $120 after Russia’s full-scale invasion of Ukraine.
It could also exacerbate tensions with enemies and partners whose help the US needs to limit exports of sensitive goods such as chips and other technologies that power Russia’s war machine.
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Nevertheless, the new restrictions will be aimed at using the softer oil market to increase pressure on Russia before Trump returns to the White House. Current officials seem to want to give Ukraine as much leverage as possible before possible negotiations.
There is a possibility that Trump could reverse these measures if they lead to higher oil prices, but this carries the political risk of looking weak or offering Russia too many concessions too quickly.
Until now, Biden has limited sanctions on Russian oil to setting the price of oil that Russia sells to avoid market turmoil and prevent gasoline prices from rising in the United States.
The next step should be a continuation of the sanctions imposed by the US last month against Gazprombank, the last major Russian financial institution to be exempted from penalties. The Biden administration had previously decided not to impose sanctions on the bank because European countries use it to pay for gas they still buy from Russia, fearing it would cause turbulence on global commodity markets. However, the decision has now been changed.
Hungary and other countries dependent on Russian gas imports have already warned that the US decision could be risky for their energy security.
