Treasury Department’s Effort to Disrupt Russian Oil Tankers
Officials in President Biden’s Treasury Department have proposed new actions aimed at crippling a fleet of aging oil tankers that are helping deliver Russian oil to buyers around the world in defiance of Western sanctions. The effort is part of a larger strategy to drain Russia of the funds needed to sustain its war in Ukraine.
Challenges and Stalled Progress
Despite the efforts to target the shadow fleet of oil tankers facilitating Russian oil sales above the imposed price cap, progress has been stalled due to concerns within the White House. Economic advisers are wary of potential impacts on energy prices, particularly ahead of the upcoming November election.
Russian Strategies and Circumvention of Price Cap
Russia has managed to circumvent the $60-per-barrel price cap imposed by the United States and its allies, enabling the country to profit significantly from its oil exports and support its military operations. This circumvention has intensified the pressure on the Biden administration to strengthen enforcement measures.
Treasury’s Objective and White House Deliberations
The Treasury Department aims to disable Russian tankers involved in bypassing the price cap to curtail Moscow’s oil revenues. However, concerns about potential impacts on oil prices and subsequent gasoline prices have led to hesitations within the White House. While Treasury officials highlight the low risks of major disruptions in the oil market, economic advisers remain cautious.
