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The US introduces extensive measures targeting the Russian energy sector and oil revenues

14.01.2025

On Friday 10 January 2025, the US introduced extensive measures targeting the Russian energy sector and Russia's oil revenues. The measures include the designation of 183 vessels, many of which are deemed to be part of the Russian shadow fleet, as well as oil traders, oilfield service providers, marine insurance companies and energy officials. The UK also joined the US in sanctioning the two major Russian oil producers Gazprom Neft and Surgutneftegas.

Lesetid 4 minutter

Secretary of the Treasury, Janet L. Yellen stated that "The United States is taking sweeping action against Russia's key source of revenue for funding its brutal and illegal war against Ukraine. […] 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".

US further strengthens the restrictions on russian oil exports 

Energy determination

The measures introduced on Friday include a determination issued by the Department of the Treasury in consultation with the Department of State pursuant to Executive Order 14024 which authorises the imposition of sanctions on any person determined to operate or have operated in the energy sector of the Russian economy. OFAC also issued General License 8L which replaces General License 8K. General License 8L authorises a wind-down of transactions related to energy until 12 March 2025, providing for a shorter wind-down period than originally outlined in General License 8K. General License 115A authorises a wind-down of transactions related to civil nuclear energy until 30 June 2025. 

Petroleum Services Determination 

In addition, the Department of the Treasury in consultation with the Department of State issued a determination pursuant to Executive Order 14071 which prohibits the provision of US petroleum services to persons located in Russia (the "Petroleum Services Determination"). The determination prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States or by a United States person of petroleum services to any person located in Russia. 

The determination exempts services related to isotopes derived from petroleum manufacturing that are used for medical, agricultural, or environmental purposes, services related to the maritime transport of Russian crude oil and petroleum products that fall within the G7's Oil Price Cap, i.e., purchased at or below the relevant price per barrel, and services in connection with the wind down or divestiture of non-Russian owned entities in Russia. Additionally, OFAC issued General License 121 which authorises transactions otherwise prohibited by the Petroleum Services Determination related to the Caspian Pipeline Consortium, Tengizchevroil and Sakhalin-2 until 28 June 2025. 

The Petroleum Services Determination enters into force at 12:01EST on 27 February 2025. 

Designations

The new measures on Friday include multiple designations, targeting vessels associated with the Russian shadow fleet, Russian oil majors, Russian marine insurance providers, oil traders and energy officials.

Notably, the US designated Russian oil majors Gazprom Neft and Surgutneftegas, as well as their subsidiaries. These measures were also adopted by the UK. Both the UK (Int/2025//5635701) and the US (General License 117) simultaneously issued general licenses to authorise transactions that are ordinarily incident and necessary for the wind down until 27 February 2025 of transactions involving Gazprom Neft, Surgutneftegas, or their subsidiaries. 

In addition, Russian marine insurance providers Ingosstrakh and Alfastrakhovanie Group were designated by the US. Ingosstrakh and Alfastrakhovanie Group were already subject to asset freeze restrictions in the UK, where they were designated on 13 June 2024 and 25 November 2024, respectively, and Alfastrakhovanie Group has been subject to an EU asset freeze since 18 December 2023. General License 117 issued by OFAC authorises wind-down transactions involving Ingosstrakh and their subsidiaries until 27 February 2025. 

Extensive measures were also implemented to weaken the Russian shadow fleet, targeting Russian oil traders and ship managers in third countries, Russian-owned vessels, including vessels owned by state-owned Sovcomflot and Rosnefteflot (both of whom were also designated pursuant to the new energy determination), and third-country vessels associated with the shadow fleet. The new measures also target Russian oilfield service providers and the management of Russian energy companies and energy officials. 

The new measures include a significant amount of new designations on the SDN list, including more than 150 individuals and entities and more than 180 vessels. 

US Department of State sanctions 

The US Department of State also imposed several new measures and designations targeting the Russian energy sector. The Department of State imposed sanctions on close to 80 individuals and entities, including energy officials, entities engaged in the production and export of Russian LNG, entities involved in Russian oil development, and entities in third countries providing material support to US sanctioned Russian entities, such as Sovcomflot and the Arctic LNG 2 project. 

More information 

More information regarding the new measures, including information on the individuals, entities and vessels designated on 10 January and general licenses, can be found at the following links: 

WR Sanctions Alerts provide you with updates on material developments in the country-specific sanctions programmes implemented by the US, the UN, the UK, the EU and Norway. We will not provide updates on mere prolongations, without material changes, of existing sanctions programmes, nor on any listings or de-listings of individuals/entities placed on implemented sanctions lists. Please note that the WR Sanctions Alerts are provided as general information and do not constitute legal advice.

Forfattere
Profile image of Tine Elisabeth Vigmostad
Tine Elisabeth Vigmostad
Partner
Profile image of Sebastian Sandtorv
Sebastian Sandtorv
Senior Associate
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Marie Solberg Hatten
Advokatfullmektig

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