Reuters: US plans new sanctions on Russia’s “shadow fleet”

January 6, 2025

By Ukraine

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The US Biden administration is preparing to impose additional sanctions targeting vessels carrying Russian oil sold above the Western price cap of $60 per barrel, Reuters reports, citing two sources with knowledge of the matter.

The move comes as the administration seeks to reinforce support for Ukraine amid the ongoing Russo-Ukrainian war ahead of President-elect Trump’s January 20 inauguration, given his frequent criticism of US support costs for Ukraine. Trump’s future approach to Russian sanctions remains unclear.

One source told Reuters on 5 January that “It is going to be a big package,” while another source said the measures would include actions against individuals involved in networks trading oil above the established price cap.

The sanctions will target Russia’s “shadow fleet” of aging ships used to evade the price cap, estimated to contain hundreds of ships. The US has already previously sanctioned dozens of vessels. This is part of efforts to reduce Russia’s oil revenue and access to supplies supporting its war in Ukraine.

The fleet relies on aging, underregulated tankers and cargo vessels to transport oil covertly. Employing tactics like ship-to-ship transfers to hide oil origins, this practice bypasses oversight, raises transparency issues, and heightens risks of environmental disasters, including oil spills.

US Treasury Secretary Janet Yellen confirmed to Reuters last month that the US was considering further sanctions on tankers, and would not rule out penalties against Chinese banks.

The G7, EU, and Australia implemented a $60 price cap in 2022, limiting Western services for Russian oil above the threshold. Russia diverted exports to China and India, frequently exceeding the cap, while remaining one of the world’s largest oil producers.

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