Biden is looking for other ways to hurt the Russian economy
The Biden administration is considering whether to impose sanctions on countries that buy Russian oil as it continues to seek tools to cripple Moscow’s position in global energy markets.
While the United States banned the purchase of Russian oil in response to President Vladimir Putin’s invasion of Ukraine, it did not impose secondary sanctions on countries that continue to do business with Moscow. Russian oil exports continued to India, China and NATO member Turkey.
European countries, while aiming to stop imports of Russian oil over the coming year, have not yet introduced an embargo. Meanwhile, rising prices have led to a 50% increase in revenue compared to last year, according to a report of the International Energy Agency. These revenues are a lifeline for Putin.
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But adding tougher sanctions to the sanctions menu, like the secondary tools the US has used against Iran, could hasten Moscow’s economic downfall.
The United States is examining “what can be done immediately to reduce the revenue the Kremlin generates from the sale of oil and ensure that countries outside the sanctions coalition, such as China and India, don’t undermine sanctions just buy more oil,” Edward Fishman, a former State Department sanctions expert, Told the New York Times.
This week, Energy Secretary Jennifer Granholm said secondary sanctions were being considered as a possible option.
“The administration is going to make decisions along those lines,” Granholm said. said, insisting she was “not telegraphing” a decision. “It’s their call,” she added.
Asked if the administration should impose secondary sanctions for Russian oil, Granholm replied, “I know it’s certainly not out of place.”
While sanctions policy is typically crafted by the Treasury and State Departments, the prospect of a deeper oil embargo could prompt the Department of Energy to intervene.
A measure being discussed would impose a cap on the price of a barrel of Russian oil, forcing other countries to pay the rate or face US sanctions.
At a G-7 meeting, Treasury Secretary Janet Yellen said the United States and other leaders were discussing how the caps could reduce Russian revenue and other measures.
“A lot of people, including me, find it attractive from a general economic perspective – but getting it up and running is a challenge, and all of those issues haven’t been resolved,” Yellen said.
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But she said officials were cautious about taking steps that could drive up energy prices.
“The goal is to keep some Russian oil on the market to keep global prices down so that we don’t have undue negative impacts on third countries,” Yellen said.