President Biden’s Treasury Department is taking bold steps to undermine a fleet of aging oil tankers facilitating the delivery of Russian oil in defiance of Western sanctions. The aim is to cripple Russia financially and weaken its ability to sustain the war in Ukraine. However, these efforts have hit roadblocks over concerns about potential impacts on energy prices leading up to the November election.
The United States and its allies have imposed penalties to limit Moscow’s earnings from oil sales, but Russia has found ways to bypass these restrictions. Treasury officials are now targeting a shadow fleet of oil tankers allowing Russia to sell oil above the $60-per-barrel price cap imposed by the US and its allies in 2022.
While the objective is to restrict Moscow’s profits from energy exports, concerns over potential price hikes and their impact on US voters have stalled the enforcement of these measures. The debate within the administration underscores the delicate balance between weakening Russia economically and avoiding backlash from consumers.
The proposal to penalize the Russian shadow fleet is still under review, with no immediate action planned. Treasury Secretary Janet L. Yellen and her team are advocating for stricter enforcement to disrupt Russia’s oil revenues.
Efforts to enforce the $60-per-barrel price cap have faced challenges as Russia uses the shadow fleet to evade restrictions. Critics argue for more stringent sanctions akin to those imposed on Iran. However, Treasury officials are confident that targeting the shadow fleet would not cause major disruptions in the oil market.
The administration faces pressure to take more decisive action against the shadow fleet tankers to further weaken Russia’s oil exports. While concerns about potential impacts on energy prices persist, experts suggest that additional sanctions may not lead to significant price spikes.
