Russia vows retaliation against new US sanctions on energy sector
3 Min Read
The latest sanctions caused oil prices to rise, with Brent crude trading 4.6% higher at $79.39 per barrel.
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The Russian national, right, the former Soviet Union, left, and the former Russian Empire flags flutter in the wind during a ceremony of flags rising held by Gazprom on the coastline near the park of the 300th anniversary of St. Petersburg at the Gulf of Finland in St. Petersburg, Russia, Saturday, June 17, 2023, with the Lakhta Center skyscraper, the headquarters of Russian gas monopoly Gazprom in background (AP Photo/Dmitri Lovetsky)
The Russian Foreign Ministry has pledged to respond to the latest wave of US and UK sanctions targeting its energy sector, describing them as "hostile actions." This follows the announcement on Friday that sanctions would now include major Russian oil companies Gazprom Neft and Surgutneftegas, along with over 180 vessels and nearly 400 individuals and entities involved in energy trade.
The measures, introduced just days before US President Joe Biden leaves office, aim to cut off Russia's critical revenue streams. According to Biden's deputy national security advisor Daleep Singh, "The United States imposed the most significant sanctions yet on Russia's energy sector, by far the largest source of revenue for Putin's war." UK Foreign Secretary David Lammy echoed the sentiment, stating, "Taking on Russian oil companies will drain Russia's war chest – and every ruble we take from Putin's hands helps save Ukrainian lives."
Sanctions Fallout
Russia has dismissed the sanctions as "baseless" and "illegitimate." Gazprom Neft stated that the measures contradict the principles of free competition. The Russian Foreign Ministry went further, accusing the Biden administration of destabilizing global markets and sacrificing the interests of US allies in Europe for short-term political objectives.
"Washington's hostile actions will not go unanswered and will be taken into account [by Moscow] when developing foreign economic strategy," the ministry said, adding that the sanctions were a deliberate move to complicate matters for the incoming administration.
The latest sanctions caused oil prices to rise, with Brent crude trading 4.6% higher at $79.39 per barrel. However, the impact on Western economies has also been significant. Since the start of the NATO-led war in Ukraine, Western sanctions have contributed to higher electricity, fuel, and food prices across Europe and the US.
Read more: UK gas reserves at 'concerningly low levels' amid Russian supply halt
Energy Resilience
Despite these challenges, Russia remains steadfast in its energy strategy. The Foreign Ministry stated that Moscow will continue its oil and gas production projects, expand oilfield services, and pursue the construction of nuclear power plants in other countries. President Vladimir Putin has previously argued that the sanctions reflect a long-term Western strategy to contain and weaken Russia, regardless of the harm caused to the global economy.
Russia's pledge to retaliate comes as European officials express concerns over the sustainability of these measures. The Financial Times reported that EU leaders fear the sanctions could be reversed by incoming US President Donald Trump, potentially undermining the current Western strategy. Kremlin spokesman Dmitry Peskov also criticized the Biden administration for leaving a "scorched earth" for Trump's presidency, while Serbia's President Aleksandar Vucic highlighted the regional consequences of these sanctions, particularly their impact on Serbia's energy security.
