Biden levies new sanctions against Russian energy sector, but it's up to Trump whether to keep them

President Joe Biden speaks at Andrews Air Force Base, Md. on Aug. 1, 2024. (AP Photo/Alex Brandon)

Washington — U.S. President Joe Biden's administration announced Friday that it's expanding sanctions against Russia's critically important energy sector, unveiling a new effort to inflict pain on Moscow for its grinding war in Ukraine as president-elect Donald Trump gets set to return to office vowing to quickly end the conflict.

The outgoing Democratic administration billed the new sanctions as the most significant to date against Moscow's oil and liquefied natural gas sectors, the driver of Russia's economy. Officials said the sanctions, which punish entities that do business with the Russians, have the potential to cost the Russian economy upward of billions of dollars per month.

More than 180 oil-carrying vessels that are suspected to be part of a shadow fleet utilized by the Kremlin to evade oil sanctions as well as traders, oil field service firms and Russian energy officials are also targeted by the new sanctions. Several of the vessels targeted are also suspected of shipping sanctioned Iranian oil, according to the Treasury Department.

"Putin is in tough shape right now, and I think it's really important that he not have any breathing room to continue to do the god-awful things he continued to do," Biden told reporters.

In the move coordinated with Washington, the U.K. also slapped sanctions on Russian energy firms. The U.S. and Britain are both targeting two of Russia's major oil producers, Gazprom Neft and Surgutneftegas, and dozens of the companies' subsidiaries.

The Foreign Office said that between them the two companies produce more than one million barrels of oil a day, worth US$23 billion a year. British Foreign Secretary David Lammy said "oil revenues are the lifeblood of Putin's war economy."

"Taking on Russian oil companies will drain Russia's war chest -- and every ruble we take from Putin's hands helps save Ukrainian lives," he said.

The U.K. has already sanctioned almost 100 vessels in Russia's oil-transporting "shadow fleet" as Ukraine's western allies seeking to increase economic pressure on Moscow ahead of any negotiations on ending the war.

White House national security spokesman John Kirby said the Biden administration chose this moment--just 10 days before Biden leaves office--for tougher oil measures because worries about world oil markets have subsided. Biden told reporters that he anticipated the move could cost drivers "three, four cents a gallon" at the pump.

"This was really based on market conditions," Kirby added. "And so the time was propitious for this decision, and that's why the president made it."

The State Department also announced it was hitting 14 senior Rosatom officials and executives with travel bans that also affect their immediate family members.

Biden administration officials said that it will ultimately be up to Trump's administration whether to keep or scrap the new sanctions.

Trump's transition team did not immediately respond to a request for comment about the sanctions.

Asked if the Biden administration consulted with the incoming Trump team, Kirby responded, "We have at every step and on every major issue been keeping the transition team informed of our decisions, what we're doing and why we're doing it."

Trump's incoming national security adviser, Mike Waltz, wrote in an opinion piece for the Economist published shortly before Election Day that the U.S. should "use economic leverage" for "cracking down on Russia's illicit oil sales" to bring Russian President Vladimir Putin to the negotiating table.

Meanwhile, Trump told reporters on Thursday that Putin "wants to meet, and we are setting it up."

Trump's warm relationship with Putin over the years has come under heavy scrutiny. The Republican president-elect has also balked at the cost of aid to Kyiv, pledging to move quickly to end the conflict upon his return to office on Jan. 20.

Trump added a new layer of doubt about future American support earlier this week when he appeared to sympathize with Putin's position that Ukraine should not be part of NATO. The president-elect has criticized the Biden administration for expressing support for Kyiv's eventual membership in the transatlantic military alliance.

Biden spoke with Ukrainian President Volodymyr Zelenskyy on Friday as the sanctions were announced, discussing his administration's ongoing support for the effort to hold Russia at bay and underscored the need for that support to continue. The White House said Zelenskyy expressed appreciation for the U.S.

"I know that there are a significant number of Democrats and Republicans on the Hill who think we should continue to support Ukraine," Biden told reporters after the call. "It is my hope and expectation they will speak up...if Trump decides to cut off funding for Ukraine."

White House national security adviser Jake Sullivan on Friday warned that a pullback in support for Ukraine would have reverberations far beyond Kyiv. He noted that the U.S. has relied on European allies cooperation over the last four years as it devised a strategy to deal with growing economic competition posed by China.

"I think it's evident that if the U.S. pulls the rug out from under Ukraine, that will have an impact on the health of our European alliances and it will have reverberations in the Indo-Pacific," Sullivan said in a conversation with a small group of reporters at the White House.

The Kremlin on Friday dismissed the new sanctions ahead of the anticipated announcement.

"We are aware that the administration will try to leave as difficult legacy in bilateral relations as possible for Trump and his team," Kremlin spokesman Dmitry Peskov said.

The designation comes under a sanctions authority approved during Russia's 2014 invasion and annexation of Ukraine's Crimea peninsula, according to administration officials who briefed reporters on the the condition of anonymity under ground rules set by the White House.

Should the Trump administration move to roll back the sanctions, it would have to first notify Congress, which would have the ability to take a vote of disapproval of such a move, the officials added.

The shadow fleet is made up of aging tankers bought used, often by nontransparent entities with addresses in non-sanctioning countries such as the United Arab Emirates or the Marshall Islands, and flagged in places like Gabon or the Cook Islands. Some of the vessels are owned by Russia's state-owned Sovcomflot shipping company. Their role is to help Russia's oil exporters elude the $60 per barrel price cap imposed by Ukraine's allies.

Finnish authorities suspect a Russia-linked shadow fleet vessel was involved in possible sabotage, cutting critical power and communications cables under the Baltic Sea between Finland and Estonia on Dec. 25.

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David McHugh in Frankfurt, Germany and Jill Lawless in London and Matthew Lee contributed reporting