The United Kingdom has imposed significant sanctions targeting Russia’s oil industry, including the major oil pipeline operator, Transneft, as part of a broader strategy to weaken Russian oil revenues. This announcement coincides with the fourth anniversary of Russia’s invasion of Ukraine, underscoring the UK’s commitment to countering Russian aggression.
On February 27, 2024, the UK government revealed nearly 300 new sanctions aimed at crippling the Kremlin’s ability to sell its oil. The sanctions specifically target PJSC Transneft, which is responsible for transporting more than 80% of Russia’s oil exports. This move is intended to hinder the Kremlin’s efforts to secure buyers for its oil amid increasing international restrictions.
In addition to sanctions on Transneft, the UK has focused on dismantling what it describes as a “dark web” of illicit oil traders. As part of this effort, the UK has sanctioned around 175 companies linked to the 2Rivers oil network, which is recognized as one of the largest operators of shadow fleets involved in the trade of Russian crude oil. The UK government emphasized that disrupting this illicit trade remains a priority, stating, “To the Kremlin and those seeking to profit from this illicit trade, the message is clear – Russian oil is off the market.”
Expanded Sanctions on Oil Infrastructure
The new sanctions extend beyond just traders and include specific measures against oil tankers. The UK has sanctioned 48 oil tankers involved in transporting oil as part of Russia’s ongoing attempts to mitigate the effects of international sanctions. The government aims to “deter, disrupt and degrade” the capabilities of the Russian shadow fleet.
Furthermore, the sanctions also encompass additional entities within Russia’s liquefied natural gas (LNG) sector. Six targets have been designated, including ships and traders, as well as key facilities such as the Portovaya and Vysotsk terminals, both crucial for Russian LNG exports.
While the UK has taken decisive action, the European Union is facing internal challenges in coordinating its response. Efforts to finalize a 20th package of sanctions were stalled due to opposition from Hungary. The Hungarian government blocked the package in reaction to the cessation of Russian oil flows through the Druzhba pipeline, which supplies crude to Hungary and Slovakia.
Impact of the Druzhba Pipeline Situation
The Druzhba pipeline has been a vital conduit for Russian oil, but its operations were significantly disrupted following damage attributed to a Ukrainian drone attack at the end of January 2024. Since then, supplies of Russian oil to Hungary and Slovakia have been halted, leading both countries to accuse Ukraine of obstructing the necessary repairs for political reasons. In response, Hungary and Slovakia have threatened to reduce electricity and gas supplies to Ukraine.
The situation highlights the complex interdependencies within European energy markets and the ongoing geopolitical tensions arising from the war. As sanctions escalate and supply lines are disrupted, the impact on energy prices and availability in Europe may become increasingly pronounced.
The UK’s latest sanctions reflect a continued commitment to countering Russia’s oil revenue streams and support for Ukraine, even as the EU grapples with its own internal divisions regarding sanctions policy. The unfolding events serve as a stark reminder of the ongoing conflict and its implications for global energy security.
