By Timothy Gardner and Nidhi Verma
WASHINGTON/NEW DELHI (Reuters) – The Biden administration plans to impose more sanctions on Russia over its war on Ukraine, taking aim at its oil revenues with action against tankers carrying Russian crude, two sources with knowledge of the matter said on Sunday.
President Joe Biden’s administration has sought to shore up support for Ukraine before President-elect Donald Trump takes office on Jan. 20 given the Republican leader’s frequent complaints about the cost of U.S. support for Ukraine.
It is unclear what Trump’s approach to sanctions on Russia will be.
The Biden administration is planning sanctions targeting tankers that carry Russian oil sold above the West’s $60 per barrel price cap, the sources said. Russia has used this so-called shadow fleet of aging ships to evade the cap. Many of the ships are less safe and prone to spilling oil, shipping experts say.
Since Russia’s February 2022 invasion of Ukraine, the U.S. has sanctioned dozens of these vessels, out of a fleet estimated to be in the hundreds, to reduce its ability to fund the invasion.
The cap has led Russia to redirect its oil sales to China and India, who have been willing to purchase Russian crude, which is typically sold at a discount to the overall market even if sold above the price cap.
“It is going to be a big package,” one of the sources said. The other source said the sanctions would also likely include measures against people involved in some networks trading oil above the price cap.
U.S. Treasury Secretary Janet Yellen told Reuters last month that the U.S. is looking at further sanctions on the tankers and would not rule out sanctions on Chinese banks as it seeks to reduce Russia’s oil revenue and access to foreign supplies to fuel its war in Ukraine.
The Treasury’s Office of Foreign Assets Control did not immediately respond to a request for comment on Sunday.
The G7, the EU and Australia imposed the $60 cap on Russian oil in late 2022, banning the use of Western maritime services such as transport, insurance and financing for shipments of oil priced at or above the cap.
Russia is among the world’s top three oil producing countries.
This post is originally published on INVESTING.
