Washington Tightens Grip on Russian Oil Trade as Global Energy Market Braces for Fallout From U.S. Sanctions

The United States has introduced significant sanctions against the Russian oil industry, targeting vessels, major companies, and key executives in a move expected to disrupt Russian oil exports and shake the global energy market. The sanctions, announced on Friday, come as part of ongoing efforts to penalize Russia for its actions in Ukraine, reports Reuters via UNN.

The U.S. Treasury’s sweeping measures include a list of approximately 180 vessels, multiple oil traders, and two major Russian oil companies, Gazprom Neft and Surgutneftegas. Additionally, sanctions have been imposed on Russian insurers Ingosstrakh and Alfastrakhovanie, which have been instrumental in covering vessels transporting Russian oil to major buyers such as India.

The announcement has already sent shockwaves through global markets, with Brent crude oil futures in London rising by 3% to $80.54 per barrel, the highest since October. Analysts expect further volatility as the sanctions take effect.

Sources in the Russian oil trade and Indian refining industry believe these measures will severely disrupt Russian oil exports to India and China, Russia’s largest buyers following sanctions imposed by the United States, the European Union, and their allies in 2022. Despite pumping approximately 10% of the world’s oil, Russia may face mounting challenges as it contends with restricted access to global markets.

Indian and Chinese refineries have relied heavily on discounted Russian oil in the wake of Western sanctions on Russian energy. However, the latest U.S. measures could force both countries to reassess their purchasing strategies.

Russian companies have previously circumvented Western sanctions by purchasing their own fleet of tankers and using domestic insurers. These strategies allowed hundreds of vessels and numerous oil traders to avoid the toughest restrictions, as the Biden administration sought to balance penalizing Russia with minimizing disruptions to global oil supplies.