The Treasury Department has prohibited American companies from providing petroleum services to the country
A US ban on providing petroleum services to Russia officially took effect on Thursday, in the latest round of sanctions against Moscow over the Ukraine conflict.
The restrictions on the operations of American companies in Russia are part of sanctions targeting the country’s oil production and exports, which was approved by the US Treasury Department in conjunction with the UK on January 10.
The measure bars US services for extracting and producing crude oil and other petroleum products in Russia. The export or re-export of oil production services, including their indirect sale, has also been prohibited. Additionally, 30 Russian companies have been placed on a special sanctions list.
Businesses were given a grace period to wind down their operations with Russian partners, which ended on February 27. Three major projects – the Caspian Pipeline Consortium (CPC), Tengizchevroil, and Sakhalin-2 – were granted exemptions and will be allowed to receive US services under a special license until June 28.
The sanctions were introduced less than two weeks before the end of Joe Biden’s term as US president.
It targeted two major Russian oil producers, Gazprom Neft and Surgutneftegaz, along with their subsidiaries and entities providing insurance and transportation services. More than 180 vessels allegedly used to transport Russian oil in defiance of Western restrictions – described by the US as a ‘shadow fleet’ – were also sanctioned.
At the time, Biden acknowledged that the latest package of sanctions could have economic repercussions for ordinary Americans, admitting that they could lead to a slight increase in gas prices. However, he claimed the move was necessary in order to reduce Russian energy revenues.
Moscow has dismissed the restrictions as “illegal.” President Vladimir Putin has said Russia has overcome the challenges caused by the sanctions, crediting them with boosting domestic industries.
Commenting on the restrictions, Russian Foreign Ministry spokeswoman Maria Zakharova said Biden’s legacy will be defined by the “mess” he left behind.
The new US administration has recently suggested that Western nations may have to consider lifting the sanctions on Russia in order to find an “enduring, sustainable” solution to the Ukraine conflict.
President Donald Trump suggested on Tuesday that Washington could lift the sanctions “at some point” during the Ukraine peace negotiations.
According to Moscow, the Western sanctions have failed to destabilize or isolate Russia, while backfiring on the countries that imposed them.
