U.S. Congress Knows How To Target Russia's Oil Revenues

Sanctions will be tougher.

A group of House of Representatives congressmen sent a letter to US National Security Advisor Jake Sullivan with a proposal to tighten energy sanctions against Russia. They noted that the scheme to limit prices for Russian oil allows Russia to continue financing the war against Ukraine, according to Unian.

“We are writing to urge the Biden Administration to target Moscow’s hard currency revenues by abandoning the failed oil price cap scheme and imposing comprehensive energy sanctions on Russia,” the letter by the Financial Services Committee published on December 20 reads.

According to lawmakers, Since the price cap was established, Russian fossil fuel exports have totalled more than $250 billion, with China alone importing more than $57 billion in Russian crude and oil products. As a result, a record Russian budget is planning to double defence spending next year.

The authors of the appeal called for measures that prevent Moscow from obtaining funds that sustain its military. This includes ending the Treasury Department’s repeated licensing of energy-related transactions with sanctioned Russian banks, which has permitted Russia to use the U.S. financial system for any transaction involving the sale of oil and natural gas.

“We also support additional designations by Treasury’s Office of Foreign Assets Control, not merely of Russia’s financial institutions, but also third-country entities that purchase Russian crude. In concert with our allies in Europe, we should be tightening EU sanctions on Russia’s oil and gas exports, rather than extending the carveouts created last year. The time has come to admit that the scheme for limiting oil prices is erroneous,” the initiators of the appeal wrote.