US and UK issue sanctions on Russia’s energy industry

New sanctions name Public Joint Stock Company Gazprom Neft and Surgutneftegas, both major players in Russian oil production

A Russian oil tanker is detained near Finland. Bloomberg

The US and UK issued sanctions against Russia's energy industry on Friday, intensifying pressure on Moscow as the war in Ukraine lurches towards its fourth year.

The measures are “the most significant sanctions yet against the Russian energy sector, the largest source of revenue for the Kremlin's war machine,” a senior Biden official told reporters in a call.

The new US sanctions name Public Joint Stock Company Gazprom Neft and Surgutneftegas, both major players in the Russian oil industry.

“The US Department of the Treasury took sweeping action to fulfil the G7 commitment to reduce Russian revenues from energy, including blocking two major Russian oil producers,” a release from the department said, referring to agreements by the world's seven largest economies to work to stymie one of the largest contributors to the country's gross domestic product.

The punitive measures also take aim at oil-carrying vessels – many of which are part of the “shadow fleet” engaged in the illegal trade of Russian oil – as well as Russia-based oilfield service providers, energy officials and “opaque traders”.

“This wide-ranging, robust action will further constrain revenue from Russia’ energy resources and degrades Putin’s ability to fund his illegal war against Ukraine,” Secretary of State Antony Blinken said in a statement.

Treasury Secretary Janet Yellen said the measures were focused on disrupting “Russia’s key source of revenue for funding its brutal and illegal war against Ukraine”.

“This action builds on, and strengthens, our focus since the beginning of the war on disrupting the Kremlin’s energy revenue, including through the G7+ price cap launched in 2022,” she said in a release. “With today’s actions, we are ratcheting up the sanctions risk associated with Russia’s oil trade, including shipping and financial facilitation in support of Russia’s oil exports.”

In a joint move, the UK also announced it was taking action against Gazprom Neft and Surgutneftegas.

“Oil revenue are the lifeblood of Putin's war economy. We will not stand by and let oil profits endanger the lives of Ukrainians – nor will we let Russia keep filling its coffers as it continues to threaten our collective security,” UK Foreign Secretary David Lammy said.

“Taking on Russian oil companies will drain Russia's war chest – and every rouble we take from Putin's hands helps save Ukrainian lives.”

Since Russia invaded in Ukraine in February 2022, the US and other countries have issues thousands of punitive economic measures against Russian citizens and companies.