Trump Considers Sanctions on Russia’s Oil Fleet Amid Ongoing Conflict

Oil prices are experiencing volatility as the market responds to potential new sanctions against Russia. President Donald Trump is reportedly contemplating imposing sanctions on Russia’s “shadow fleet” of oil tankers unless Moscow agrees to a peace deal with Ukraine by January 29, 2024. This comes amidst a backdrop of already stringent sanctions that have left the Russian economy increasingly isolated from Western markets.

The term “shadow fleet” refers to a network of oil tankers operating under opaque ownership structures. These vessels evade traditional Western services such as insurance and logistics, complicating efforts to penalize the owners directly. Despite this, recent actions to sanction these ships have shown some effectiveness. According to two individuals familiar with discussions within the White House, targeting the shadow fleet is seen as a straightforward method to apply more pressure on the Kremlin.

In the context of these discussions, a third source close to the administration indicated that broader sanctions options, including those affecting the fleet, are currently under review. The Biden administration has already implemented sanctions on over 200 named Russian crude, chemical, and product tankers. Trump has hesitated to expand these measures, hoping for a ceasefire in Ukraine.

The urgency surrounding this issue is underscored by the increasing reliance of Russia on countries like China and India, which are prominent members of the BRICS coalition. Both nations have expressed intentions to maintain their energy partnerships with Russia, even in the face of potential secondary sanctions from Washington.

As highlighted by the Financial Times, oil sales from the shadow fleet have become a significant funding source for Russia’s military operations. The European Union recently added over 100 ships to its sanctions list, bringing the total to 415. These measures, however, have not deterred Russian President Vladimir Putin from continuing his military campaign in Ukraine.

The West appears to be running out of effective strategies to counter Russia’s actions, having already imposed unprecedented sanctions. The Kremlin’s position remains firm, demanding substantial territorial concessions from Ukraine and a binding commitment against NATO membership. The Zelensky government has consistently rejected these terms.

As the deadline approaches, the outcome of Trump’s considerations on sanctions will be closely watched, not only for its potential impact on oil prices but also for its implications in the ongoing conflict.