Oil pump jacks, also known as “nodding donkeys” in a Rosneft Oil Co. near the village of Sokolovka, in the Udmurt Republic, Russia, on Friday, November 20, 2020.
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The U.S. Treasury Department clarified Friday afternoon that Wall Street traders and banks can continue to buy and sell Russian oil and gas despite a series of sanctions against Russia and others. largest lender in the country.
The new guidance comes as traders and banks worry about breaking US trade laws as world leaders rally against Russian President Vladimir Putin’s gratuitous invasion of Ukraine. .
But the Treasury Department emphasized in a post that US sanctions on Russia’s biggest banks – including VTB Bank – does not apply to energy transactions until June 24. The ministry also reassured investors that Russian energy shipping companies goods for sale to the US is also deducted from the penalties.
“In general, energy-related activities – including buying, selling, or transporting Russian-origin oil, gas, or other energy-related products, by persons of the United States or other United States – still allowed,” the Treasury said on its website. “The energy sector of the economy of the Russian Federation itself is not subject to comprehensive sanctions.”
The update from the Treasury, which enforces the majority of US sanctions and tariffs, comes amid speculation that The US may soon choose to ban Russian energy imports in addition to the series of penalties already announced against the Kremlin.
Oil increase by 7% on Friday in a volatile session as Russia’s invasion of Ukraine continued to rock markets in New York and Chicago. Crude oil futures are up more than 20% since the United States and its allies sanctioned Moscow in late February amid disruptions in sales out of Russia and uncertainty about how long the fight could last. .
Brent Futures Contract rose $7.65 or 6.9% to $118.11 a barrel, while US West Texas Intermediate Crude Oil rose $8.01, or 7.4%, to $115.68. That was Brent’s highest close since February 2013 and WTI’s since September 2008.
U.S. Treasury Secretary Janet Yellen speaks during a news conference with Irish Finance Minister Paschal Donohoe at Government buildings in Dublin, Ireland, November 1, 2021.
Clodagh Kilcoyne | Reuters
The latest oil price rally came earlier on Friday when comments from the White House sparked speculation that an outright ban on US energy imports could be imminent.
Administration officials say the US economy can withstand the impact of an outright ban on Russian crude oil imports if it works with its international partners. Russia is one of the world’s largest energy exporters and selling energy to the US is one of the remaining ways Moscow can gain access to the US dollar while its own currency depreciates.
“We’re in a very good position and what we know from the US economy is that we don’t import a lot of Russian oil,” said Cecilia Rouse, chair of the White House Council of Economic Advisers. .
“We are looking at the options we can make right now if we cut US energy consumption on Russian energy,” she said. “But what really matters most is that we maintain a stable global energy supply.”
The threat of upcoming sanctions on Russia’s energy sector is facing some energy traders as much of the energy market is based on futures contracts – agreements to buy oil. or gas at a specified monthly price in the future.
Many traders have asked the Treasury Department in recent days whether they will have to suspend energy-related transactions on June 24.
If the Biden administration does not renew the special regulation for Russian energy exports by June 24, the Office of Foreign Assets Control will issue another license to advise traders on how to cut the energy contracts in an orderly manner, the Treasury said.
