New US sanctions add nearly 200 more Russian ships, two oil producers and two of the principal Russian maritime insurers to efforts to restrict Russian oil revenues.
Coordinated actions with the State Department block two active liquefied natural gas projects, a large Russian oil project, and third-country entities supporting Russia’s energy exports. State is also designating numerous Russia-based oilfield service providers and senior officials of State Atomic Energy Corporation Rosatom.
The new sanctions affect producers Gazprom Neft and Surgutneftegaz and insurers Ingosstrakh and Alfastrakhovanie, which insure much of Russia's "shadow fleet" of tankers. Also included are "opaque traders of Russian oil" and two UAE-based ship managers.
UK Authorities joined in the sanctions on Gazprom Neft and Surgutneftegaz.
Reuters reports the added sanctions are expected to discourage Indian importers who have flocked to inexpensive Russian sources in recent years. India has become the largest importer of Russian oil in recent years. Not all agree. Nikesh Shukla, a tanker analyst with S&P Global Commodity Insights, noted at the introduction of sanctions last year on the Russian fleet "India will find a way ... to continue to buy Russian oil,"
PETROLEUM SERVICES PROHIBITION
Treasury, in consultation with the Department of State, issued a new determination pursuant to E.O. 14071 prohibiting the provision of U.S. petroleum services to persons located in the Russian Federation, cutting off Russia’s access to U.S. services related to the extraction and production of crude oil and other petroleum products. The prohibition takes effect beginning at 12:01 a.m. eastern standard time on February 27, 2025.
It is not immediately clear that this measure will address the flourishing trade conducted by the world's largest oil services company SLB. The US firm, formerly known as Schlumberger has continued to expand it's Russian operations since the 2022 invasion of Ukraine, much to the consternation of lawmakers and competitors.
RUSSIAN OIL MAJORS
Pursuant to today’s determination, OFAC designated two of Russia’s most significant oil producers and exporters pursuant to E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy and pursuant to E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Public Joint Stock Company Gazprom Neft (Gazprom Neft) is a Russia-based, vertically integrated oil company whose core activities include the exploration, production, and sale of oil.
Surgutneftegas is a Russia-based, vertically integrated oil company whose core activities include the exploration, production, and sale of oil.
The UK is also sanctioning Gazprom Neft and Surgutneftegas today.
Alongside Gazprom Neft and Surgutneftegas, OFAC is designating more than two dozen Gazprom Neft and Surgutneftegas subsidiaries. All entities owned 50 percent or more, directly or indirectly, by Gazprom Neft, Surgutneftegas, or their subsidiaries listed today, are also subject to blocking, even if not identified by OFAC.
For more information on the Gazprom Neft and Surgutneftegas subsidiaries targeted today, please see Annex 1.
RUSSIA’S SEABORNE OIL EXPORTS
Russia has grown increasingly reliant on vessels that participate in high-risk shipping practices to facilitate illicit or sanctionable activity, often called the “shadow fleet.” Today’s action sanctions 183 vessels, largely oil tankers that are part of the shadow fleet as well as oil tankers owned by Russia-based fleet operators. Several of the vessels sanctioned today have shipped not only Russian oil, but also sanctioned Iranian oil. OFAC is also sanctioning two Russia-based maritime insurance providers, Ingosstrakh Insurance Company and Alfastrakhovanie Group, which were previously sanctioned by the UK.
For more information on these targets, please see Annex 2.
OPAQUE TRADERS OF RUSSIAN OIL
Similarly, Russia’s dependence on opaque traders willing to ship and sell its oil has dramatically increased. These traders often are registered in high-risk jurisdictions, have murky corporate structures and personnel with links to Russia, and conceal their business activities. Many were only established in the wake of Russia’s full-scale invasion of Ukraine and quickly began moving hundreds of millions of dollars’ worth of Russian oil within months of their creation. OFAC has previously sanctioned such traders and is taking further action today by sanctioning opaque traders and a shadowy Government of Russia-linked network facilitating massive amounts of oil exports.
For more information on these targets, please see Annex 3.
OILFIELD SERVICE PROVIDERS AND RUSSIAN ENERGY OFFICIALS
Russia’s domestic oil industry is supported by providers with critical specialized services that enable producers to keep oil flowing from wells and provide technical know-how and equipment to allow oil producers to access challenging reserves. In addition to the determination described above that prohibits the provision of U.S. petroleum services to persons located in the Russian Federation, today’s action sanctions more than 30 Russia-based oilfield service providers.
Additionally, OFAC is sanctioning more than a dozen leading Russian energy officials and executives, including the CEOs of a number of Russian oil producers.
For more information on these targets, please see Annex 4.
Links:
Department of State’s fact sheet and the Department of the Treasury’s press release.
OFAC also has issued
Additionally, OFAC has revoked Russia-related General License 93, "Authorizing Transactions Involving Certain Sovcomflot Vessels."
OFAC furthermore has issued five new, Russia-related Frequently Asked Questions (FAQs 1213 - 1217), and amended 14 Russia-related Frequently Asked Questions (FAQs 967, 976, 977, 978, 999, 1011, 1012, 1017, 1117, 1126, 1182, 1183, 1201, and 1203).
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