U.S. strengthens sanctions against Russia by targeting Russian oil production and exports

On January 10, 2025 Washington took comprehensive measures to fulfill the G7 commitment to reduce Russian revenues from oil and other commodities. The Biden administration’s final round of sanctions designates Gazprom Neft and Surgutneftegas, more than 180 vessels, two insurance companies, dozens of oil traders, oilfield service providers, and energy officials.

Russia’s energy sector

The Office of Foreign Assets Control (OFAC) directly designated Gazprom Neft and Surgutneftegas, two of Russia’s most crucial oil producers and exporters, alongside dozens of their subsidiaries. Moreover, OFAC sanctioned more than a dozen leading Russian energy officials and executives.

In addition, by issuing General License 8l, OFAC amended General License 8k which had authorized energy transactions with certain Russian entities and had been due to expire at the end of April 2025. General License 8l authorizes the wind down of energy transactions with these entities by March 12, 2025. Therefore, there are no more general licenses for energy transactions with Russia after that date. Anyone who continues to transact with sanctioned Russian energy entities could find themselves subject of US sanctions.

Russia’s seaborne oil exports

Next to targeting two Russia-based maritime insurance providers, Ingosstrakh Insurance Company and Alfastrakhovanie Group, OFAC designated 183 vessels, mostly oil tankers that are part of the so-called shadow fleet as well as oil tankers owned by Russia-based fleet operators such as Sovcomflot. In a similar vein, OFAC blocked certain oil traders registered in high-risk jurisdictions with dubious corporate structures and personnel with ties to Russia.

Petroleum services prohibition and oilfield service providers

Pursuant to Executive Order 14071, the US Treasury prohibited the provision of US petroleum services to persons located in the Russian Federation as of February 27, 2025, hereby cutting off Russia’s access to US services related to the extraction and production of crude oil and petroleum products. Additionally, OFAC designated more than 30 Russia-based oilfield service providers.

Legal implications

All aforementioned persons are sanctioned pursuant to Executive Order 14024 and Executive Order 13662 meaning that the property of these persons that is located in the United States or comes within the control of any US person is blocked. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. It is prohibited to provide funds, goods, or services to the sanctioned persons and to receive funds, goods, or services from any such person.