The United States sanctioned 600 Russian-linked entities Friday to mark the two-year anniversary of Russia’s invasion of Ukraine as part of a multinational effort aimed at cutting into Russia’s war chest while also limiting its ability to build weapons and profit from its shrinking fossil fuel revenue.
Speaking to reporters on a call previewing the effort, Deputy Treasury Secretary Wally Adeyemo said the sanctions, announced in partnership with other U.S. allies in the United Kingdom and European Union, will seek to further cut Russia off from the global economy and “put sand in the gears of Russia’s military-industrial complex” by limiting its ability to build weapons and starve it of its oil and gas revenue.
Also on Friday, the Commerce Department added 100 additional Russian entities and third-country entities to its export control list in a bid to hold Russia accountable for its war and for its human rights abuses, most recently the death of jailed Russian opposition leader Alexei Navalny.
Adeyemo also called on House lawmakers to pass the $95 billion defense supplemental for Ukraine and other countries approved by the Senate in a bipartisan 70-29 vote earlier this month.
Overall, Treasury officials sought to underscore just how much the financial conditions in Russia have changed as a result of sanctions packages passed by the U.S., the U.K., and the EU in the 24 months since Russia’s invasion of Ukraine.
Russia’s oil revenue is now down 40% compared to the start of the war in Ukraine, officials said, and the cost of building its military has increased by 70%.
“For the first time in Russian history, their budget entails spending more on their military than on their on their population,” Adeyemo said.
One way the U.S. and its allies have sought to cut into the Kremlin’s war revenue is via the Russian oil price cap, a first-of-its-kind effort aimed at limiting Moscow’s fossil fuel profits while also ensuring its oil and gas exports remain on the global market.
The Treasury Department has rolled out a slew of new enforcement mechanisms and sanctions in recent months aimed at ensuring compliance with the cap and preventing third countries or unmarked vessels from shipping oil above the capped price, which currently stands at $60 per barrel.
Officials made clear Friday that while they remain committed to taking new enforcement measures on the price cap, they have no immediate plans to lower the oil price cap, as suggested by some analysts in the U.S. and EU as a means of further restricting Russia’s war profits.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Instead, they said the new actions “will force Russia to face two very tough choices,” the first being whether to continue to sell oil within the $60 price cap set by the G7-led coalition or to invest in creating an independent ecosystem of Russian oil tankers and financial intermediaries to provide maritime services and insurance for the cross-country voyages.