Agencies
US Treasury Secretary Janet Yellen told Reuters that the US is looking at further sanctions on “dark fleet” tankers and will not rule out sanctions on Chinese banks as it seeks to reduce Russia’s oil revenue and access to foreign supplies to fuel its war in Ukraine. Yellen said in an interview that the US and its allies also could consider lowering their $60-per-barrel oil price cap on Russian oil, which prohibits Western insurance and maritime services on cargoes above that level.
The Treasury has already sanctioned individual tankers and their owners for operating above the price cap and can do more in this area, Yellen added, suggesting additional measures in the five weeks before she leaves office.
“There are a number of possibilities here. We don’t preview sanctions, but we’re always looking at oil revenues and if we can find ways to further impair Russian oil revenues, that would, I think, strengthen Ukraine’s hand.
That remains on our list,” Yellen said. Earlier this week, Yellen said softness in the oil market presents an opportunity for more sanctions. Benchmark Brent crude traded at $74.50 per barrel on Friday, down from $85.57 when the $60 cap was set in December 2022.
President Joe Biden’s administration has been racing to shore up support for Ukraine before President-elect Donald Trump takes office on Jan 20, given the Republican leader’s frequent complaints about the cost of US support for Ukraine.
US Treasury officials continue to have conversations with their Chinese counterparts on efforts to detect financial institution activity that could be aiding transactions related to Russia’s war effort.
Yellen said these discussions have been aided by efforts to rebuild US-China economic and financial communications over the past two years. “I absolutely would not rule out the possibility we would sanction an individual bank if we had the necessary level of ... evidence to be able to put sanctions on,” she said. “But we also do have a channel where we’ve been able to discuss specific concerns, and sometimes that could be adequate as well.”
She said warnings to larger Chinese banks have been successful, making them “very wary” of sanctions that would cut them off from dollar-based transactions.
In an executive order about a year ago, Biden gave Treasury the authority to levy secondary sanctions on financial institutions that facilitate war-related transactions. As Russia’s economy becomes more dominated by military production, it is becoming harder to distinguish between strictly commercial and war-related deals.
