The West has once again expanded its anti-Russian sanctions — this time its restrictions are truly exceptional, including a salvo from the United States and the 13th EU package. Britain, Canada and Australia have also joined in.
Washington, the sanctions flagship, dealt its blow on February 23 at many Russian individuals and industries, the national fuel and energy complex included. Thus, the US sanctions list has expanded to embrace a number of major Russian oil and gas companies, particularly RusChemAlliance LLC and NOVATEK-Murmansk LLC. The entire LNG industry has sustained a broadside, including Modern Marine Arctic LNG Transport LLC (Sovcomflot and NOVATEK’s joint venture, which serves as the owner and operator of a gas carrier fleet with the Arctic LNG 2 project, along with other current and future projects by NOVATEK); Rusatom Arctic JSC (a Rosatom subsidiary established to implement Arctic projects related to developing the Northern Sea Route’s cargo base); Zvezda Shipbuilding Complex LLC, which has an impressing order portfolio for the construction of ice-class methane carriers.
Blocking sanctions have been introduced against JSC RosGeo and most of its structures: Zarubezhgeologiya, Polar Marine Geological Exploration Expedition (PMGRE), Siberian Polar Orbiting Geophysical Observatory, Tula Scientific Research and Geological Exploration Enterprise, Russian Petroleum Geological Institute-Geologorazvedka, All-Union Scientific Research Institute-Zarubezhgeologiya, and others. The US has also implemented restrictions against Izhevsk Oil Engineering Plant, Sovcomflot, and a number of tankers.
Britain and Canada have expanded their sanctions lists as well to embrace top managers of NOVATEK, Arctic LNG 2 LLC and its head, director general of JSC Ust-Luga Oil.
Australia followed suit to come up with new restrictions against Russia’s energy sector. The “Australian list” now includes Surgutneftegaz director general Vladimir Bogdanov and governors of Russia’s two oil and gas regions, i.e. Dmitry Artyukhov of the Yamalo-Nenets Autonomous Region and Natalya Komarova of the Khanty-Mansiysk one.
And yet, the European 13th EU package has almost nothing to do with oil or gas, despite the preliminary lengthy discussions to ban Russian LNG, among other things. Brussels has played safe to avoid another erosion of Europe’s energy security. Indeed, there have been media reports that the next few weeks will see preparations for the 14th package — the one to ostensibly energy.
The joint statement by G7 leaders emphasizes their commitment to developing and taking steps aimed to reduce the Russian Federation's energy revenues, and tighten control over compliance with price caps on its black gold.
In turn, Moscow has promptly expanded the list of those banned from entering the Russian Federation — a number of politicians and officials from the pool of unfriendly nations. The Ministry of Justice has been also working on a new administrative code article on liability for non-compliance with counter-sanctions.
As Western sanctions tighten, Russian oil exports are still stable as regards both the volume and diversification. As of yearend 2023, Russia increased its oil and petrochemical exports to friendly countries to 86% and 84% respectively. A statement to that effect came from Deputy Prime Minister Alexander Novak.
At the same time, Russia met its goals for reducing oil exports in January as part of the OPEC+ agreements. This was reported by Bloomberg: “The nation’s daily crude exports last month were 42,000 tons lower than the May-June average, according to people familiar with the data. That’s equivalent to about 307,000 barrels a day, based on the usual 7.33 barrels-per-ton conversion ratio for Russian oil.”
Issues with Sokol oil have been addressed as well. Refineries in China, the world's largest oil importer, have been ordering lots of oil from the Russian Far East. They prefer Sokol to Indian oil refineries with their fear for sanctions. Still, Reuters writes India also started purchasing Sokol after a two-month break.
The pool of Russian oil buyers has been getting increasingly diverse. Havana intends to buy more, albeit on credit. Russia has granted Cuba two loans for oil and petroleum products supplies this year, Russian Foreign Minister Sergei Lavrov said recently.
This is not for the first time that the national oil and gas industry proves resistant to sanctions, so the February wave is unlikely going to affect its sustainability in a big way.
