The US does not impose new sanctions against Russian tankers due to fear of rising oil prices

The US Treasury Department has proposed new sanctions for Russian tankers to reduce the possibility of circumventing sanctions, but the White House fears that such actions could negatively affect oil prices and Biden's re-election. UNN writes with reference to The New York Times.

US Treasury Department officials appointed by President Biden have proposed new measures to combat the aging oil fleet that helps Russia circumvent Western sanctions by delivering oil to global buyers. These measures are intended to undermine the financial support Russia needs to wage war in Ukraine. However, there are concerns in the White House that such actions could negatively affect energy prices ahead of the presidential election.

The United States and its allies have already imposed sanctions and restrictions on the sale of Russian oil abroad, setting a price cap of $60 per barrel. russia has found ways to circumvent these restrictions, prompting the Biden administration to step up measures aimed at the so-called shadow fleet.

These actions have been delayed by disagreements between Treasury officials and White House economic advisers, who are worried about potentially higher oil and gasoline prices in the United States, which could negatively affect Biden's re-election. Despite the Treasury's analysis showing low risks of impact on the oil market, the White House did not approve these proposals.

The delay in the decision has caused irritation among other members of the administration, who have not received answers from the National Economic Council, headed by Lael Brainard, as to why the action was delayed. White House officials privately described the process as routine and noted that a decision had not yet been made.

Instead, the White House released a statement from Biden's senior adviser, Amos Hochstein.

Our energy sanctions enforcement actions are focused on putting a price on Russia, Iran, and other bad actors while preventing energy price spikes that would not only harm U.S. consumers but also increase the revenue of the very bad actors we are trying to hold accountable

The White House has faced internal and external pressure to more actively enforce the oil price cap that was developed by Treasury Secretary Janet Yellen and her team in the months following Russia's invasion of Ukraine. After the invasion, the United States and Europe imposed a ban on Russian oil imports to cut into the revenues of one of the world's leading oil producers. However, Yellen and other leaders of major democracies recognized that a complete ban could cause a global price shock that could push the price of gasoline in the United States to $7 per gallon.

As an alternative plan, they decided to use the maritime industry, including shipping and insurance companies, to ensure that Russia would only sell oil at a discounted price of $60 per barrel, $25 below the world market level.

The price cap was initially effective, but Russia quickly found ways around it by using a group of obsolete tankers known as Sovcomflot without Western insurance, known as the shadow fleet. This allowed Russia to continue earning steady revenues from oil exports while financing its war against Ukraine.

Critics argue that the current limit of $60 per barrel is too high and point to the Biden administration's too lenient approach to enforcing the cap. They are calling on the Treasury Department to impose stricter oil sanctions on Russia, similar to those applied to Iran's oil sector.

Recall

In response to sanctions imposed by the European Union, Russia has imposed restrictions on broadcasting and access to the territory of the Russian Federation for more than 80 European media outlets .