Biden Imposes Sanctions on Russian Oil to Strengthen Ukraine and Trump’s Leverage

This new wave of sanctions, aimed at crippling Russia’s oil revenue streams, comes as the war, which began in February 2022, continues to cause significant loss of life and widespread destruction in Ukraine. The sanctions are designed to undermine the Kremlin’s ability to finance its war machine, with energy exports serving as Russia's primary economic lifeline.

A senior Biden administration official described the sanctions as "the most significant actions yet against Russia's energy sector," stressing that this is the "largest source of revenue for the Kremlin’s war effort."

The U.S. Treasury Department has targeted major Russian energy players, including Gazprom Neft and Surgutneftegas, along with 183 vessels involved in shipping Russian oil—many of which are part of a "shadow fleet" of aging tankers operated by non-Western companies. These sanctions also encompass the global networks involved in trading and transporting Russian petroleum, many of which have been used to divert oil to countries like China and India, following the 2022 G7-imposed price cap on Russian oil. Some tankers have also been found shipping both Russian and Iranian oil.

“These sanctions aim to disrupt every link in the chain of Russian oil production and distribution,” the official explained. “If fully enforced, they could cost Russia billions of dollars per month, further straining its economy.”

The sanctions target multiple aspects of the Russian energy sector—oil producers, transport vessels, intermediaries, traders, and ports—in an effort to maximize economic pressure on Moscow. The Biden administration believes that these measures, if properly enforced, will make it even more costly for Russia to evade the sanctions, weakening its financial position further.

Following the announcement, global oil prices surged by more than 3%, with Brent crude approaching $80 per barrel. This spike was anticipated, as a leaked document detailing the sanctions had already circulated among traders, particularly in Europe and Asia.

These latest sanctions are part of a broader strategy, with the U.S. having already provided Ukraine with approximately $64 billion in military assistance since the war’s start. This includes $500 million in new aid this week for air defense missiles, air-to-ground munitions, and additional fighter jet support equipment.

Friday’s sanctions follow earlier U.S. measures targeting Russian financial institutions, including Gazprombank, which serves as a key conduit for Russia’s energy transactions. These sanctions, along with those imposed earlier this year on Russian oil tankers, have had a noticeable impact on the Russian economy, with the ruble plummeting to its lowest level since the war began and inflation surging to nearly 10%.

“We expect these new sanctions to further exacerbate the economic pressures on Russia, already evident in the inflationary surge and the bleak economic forecast for 2025,” a second Biden official stated.

Leverage for Trump’s Administration

Biden officials have briefed the incoming Trump team on the new sanctions. However, it will be up to President-elect Trump, who assumes office on January 20, to decide when or if he will ease any of the sanctions imposed by the current administration. One official emphasized that the sanctions, along with ongoing military aid to Ukraine, would provide the incoming administration with substantial leverage in any future peace negotiations.

While Trump’s return to the White House has sparked hopes of a diplomatic breakthrough to end the war, there are concerns in Kyiv that any peace deal brokered under his leadership could come at the expense of Ukrainian territory. Trump’s advisers have suggested potential proposals that could see parts of Ukraine ceded to Russia in exchange for a cessation of hostilities.

The Trump transition team has yet to comment on the new sanctions. However, one Biden official noted that any reversal of these measures would require notification to Congress, with lawmakers given an opportunity to challenge the decision. Several Republican members of Congress had actively pushed for the imposition of these sanctions, underscoring bipartisan support for the move.