The United States escalated its economic offensive against Russia on Thursday, 2 November, unveiling a broad set of sanctions that take aim at Russia’s future energy projects, specific technologies aiding in the war effort in Ukraine, and mechanisms Russia has allegedly used to circumvent existing sanctions.
In a significant move, the State Department announced sanctions against a key enterprise involved in the Arctic-2 LNG project in Siberia. This measure is intended to disrupt Russia’s potential future energy exports, particularly its capacity to deliver liquefied natural gas (LNG) to the global market.
The Department of Commerce blacklisted twelve Russian companies, citing their role in supporting Russia’s military capabilities through the provision of drones, which are believed to be instrumental in Russia's military operations in Ukraine.
Efforts to thwart sanctions evasion have also been intensified, with the Treasury Department cracking down on entities in the United Arab Emirates, Turkey, and China. These countries are alleged to have continued supplying Russia with high-priority, dual-use goods, crucial for Russian weaponry systems.
The Treasury's latest round of sanctions targeted seven Russian banks along with numerous industrial entities, including Gazpromneft Catalytic Systems LLC, implicated in manufacturing chemical agents for advanced oil refining in Russia.
In anticipation of these sanctions, Russian officials had expressed an expectation of escalating penalties from the West but maintained a narrative of resilience, suggesting that while Western interests might be harmed by such sanctions, Russia’s economy was successfully adapting.
LNG and Lancet Drone Sanctions
The Arctic LNG 2 company, along with other entities targeted in previous actions taken in September, finds itself at the center of U.S. efforts to hinder Russia’s future energy production, reminiscent of the strategy employed after Russia's annexation of Crimea in 2014. Such projects, which are heavily reliant on Western technology, are particularly vulnerable to sanctions.
The U.S. is also strategically trying to undercut Russian LNG exports to Europe, which, to date, has only banned Russian gas delivered through pipelines. With Arctic-2 LNG poised to begin exports, it remains to be seen how much these sanctions will impede Russia’s LNG trade, particularly as Novatek, Russia's leading LNG producer, plans to initiate shipments from the project early next year.
The Biden administration has also imposed sanctions directly targeting the Lancet drone for the first time. The Lancet, a loitering munition, has increasingly menaced Ukrainian forces according to reports from the front lines.
Entities such as ZALA Aero, which designs and produces these drones for the Russian Ministry of Defense, along with its owner Aleksandr Zakharov and his family, have been specifically singled out in these sanctions.
Responses and Reactions
The new sanctions were commended by Ukrainian President Volodymyr Zelenskyy, who highlighted their necessity and emphasized the importance of full enforcement to prevent any circumvention by Russia. Andriy Yermak, Zelenskyy’s chief of staff, expressed satisfaction with the tightened restrictions against entities linked to the Russian military-industrial complex.
Ensuring Sanction Enforcement
The U.S. has not only expanded the scope of its sanctions but is also exerting diplomatic pressure to ensure global compliance. Turkish and UAE firms have been sanctioned, including those implicated in the transport of aviation parts and other high-priority goods to Russia.
Chinese entities have also been targeted, with some accused of shipping vital components such as electro-optical equipment and radar parts to Russian companies.
Moreover, the State Department has levied sanctions on various defense-related entities and procurement networks operating out of the UAE.
Broader Sanction Impact
The sanctions extend beyond technology and energy, with the U.S. also penalizing construction companies, Russian officials, and a major metals and mining company tasked with developing one of the world's largest titanium ore deposits in Russia.
In light of these comprehensive measures, the international community watches keenly to assess the full impact of these sanctions on Russia’s military campaign in Ukraine and its broader economic stability.
Germany in WWII developed ’synthetic oil’ to supplement natural oil loss production. Even though the Russians do not have the genius to be creative, they utilized 3rd party deals to get what the war effort needs at a premium cost. Hopefully its transition to economic system on a war footing goes bankrupt when this war is over and there is another 1917!
jolly good, and about time! bring on more....
I understand why the West did not hit Russia will all possible sanctions at once - sanctions held back can be used as threats to modify Russia's behavior. However, since Feb 2022, Russia has shown itself to be incorrigible and so the only way Eastern European nations can feel safe is if Russia's war machine is completely dismantled. At this point, this war is about rendering Russia unable to invade (smaller) neighbors. If we fail Ukraine now, American troops may have to go fight in Estonia, Lithuania or Latvia.
Also, Putin is testing NATO's resolve: If we do not back Ukraine now will we back the Baltic NATO allies later?
Everyone seems to agree that we cannot negotiate with Putin,…
They need to be sanctioned out of existence.