New energy sector determination targets Russia’s primary revenue source with sanctions against Gazprom Neft and Surgutneftegas, more than 180 vessels, and dozens of oil traders, oilfield service providers, insurance companies, and energy officials
WASHINGTON – Today, the U.S. Department of the Treasury took sweeping action to fulfill the G7 commitment to reduce Russian revenues from energy, including blocking two major Russian oil producers. Today’s actions also impose sanctions on an unprecedented number of oil-carrying vessels, many of which are part of the “shadow fleet,” opaque traders of Russian oil, Russia-based oilfield service providers, and Russian energy officials. Today’s actions are underpinned by the issuance of a new determination that authorizes sanctions pursuant to Executive Order (E.O.) 14024 against persons operating or having operated in the energy sector of the Russian Federation economy. These actions substantially increase the sanctions risks associated with the Russian oil trade.
The United Kingdom (UK) is also taking action today, joining Treasury in sanctioning two major Russian oil producers.
“The United States is taking sweeping action against Russia’s key source of revenue for funding its brutal and illegal war against Ukraine,” said Secretary of the Treasury Janet L. Yellen. “This action builds on, and strengthens, our focus since the beginning of the war on disrupting the Kremlin’s energy revenues, including through the G7+ price cap launched in 2022. With today’s actions, we are ratcheting up the sanctions risk associated with Russia’s oil trade, including shipping and financial facilitation in support of Russia’s oil exports.”
The Department of State is also taking steps to reduce Russia’s energy revenues by blocking 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.
RUSSIA’S ENERGY SECTOR
Today, the U.S. Departments of the Treasury and State are taking action to further implement commitments made by G7 leaders to reduce Russian revenues from energy and other commodities. The Secretary of the Treasury, in consultation with the Secretary of State, issued a determination pursuant to E.O. 14024 that authorizes the imposition of sanctions on any person determined to operate or have operated in the energy sector of the Russian Federation economy. This new determination strengthens the ability of Treasury and State to target revenue-in particular, revenue generated from the export of oil-that Russia uses to fuel its brutal war against Ukraine and other harmful foreign activities.
Additionally, Treasury issued amended General License 8L, which authorizes certain wind-down transactions related to energy through 12:01 a.m. eastern daylight time, March 12, 2025. The narrowing authorization for transactions related to Russian energy further reduces Russia’s ability to leverage this sector and fund its war machine.
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.
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.