Washington's political squeeze

Washington is still tightening sanctions on Russia’s energy trade, but it keeps writing carve-outs to avoid jolting the oil market. (treasury.gov) The Biden administration’s sanctions architecture started with the Group of Seven and European Union oil price cap set at $60 a barrel on Dec. 3, 2022, with the stated aim of cutting Kremlin revenue while keeping Russian crude flowing to third countries. The U.S. Treasury followed with implementation guidance on Nov. 22, 2022, and Feb. 3, 2023. (consilium.europa.eu) That design built exemptions into the policy from the start. European Union officials said the cap was meant to “mitigate adverse consequences on energy supply to third countries,” and Treasury’s guidance tied the policy to continued maritime transport below the cap. (consilium.europa.eu) Washington kept adding pressure in 2024 and 2025. On June 12, 2024, the State Department announced more than 300 sanctions targets tied to Russia’s wartime economy, and on Jan. 10, 2025, Treasury and State expanded that push with sanctions on major energy actors, more than 180 vessels, and new petroleum-services restrictions. (state.gov) Even in that Jan. 10, 2025 package, Treasury issued a stack of general licenses alongside the penalties, including wind-down authority for energy transactions, civil nuclear transactions, safety and environmental transactions, and some project-specific petroleum services. (treasury.gov) Treasury’s own FAQ on Jan. 10, 2025 said the new petroleum-services determination was issued “in line with G7 efforts” and framed it as another revenue squeeze, not a blanket shutdown of Russian oil trade. That distinction is the center of Washington’s political problem: punish Moscow without triggering a supply shock that hits allies and consumers. (treasury.gov) The pattern continued on March 12, 2026, when Treasury issued General License 134 to authorize the delivery and sale of Russian crude and petroleum products that had already been loaded on vessels as of that date. That kind of wind-down measure limits immediate disruption for traders, shippers, and buyers. (treasury.gov) European governments have followed the same logic. The European Council’s sanctions timeline says the bloc’s 18th package, adopted on July 18, 2025, lowered the crude price cap from $60 to $47.6 a barrel while also expanding action against Russia’s “shadow fleet” of tankers used to move oil outside Western rules. (consilium.europa.eu) The European Union’s sanctions explainer says the shadow fleet is a network of aging tankers carrying Russian crude or products made from Russian crude in circumvention of sanctions and the cap. That leaves Washington and its partners trying to show resolve with tougher rules while preserving enough legal trade to keep global barrels moving. (consilium.europa.eu) The result is a sanctions policy built to look hard and bend where oil markets demand it. Each new restriction comes with another license, deadline, or exception that keeps the coalition together and the ships moving. (treasury.gov)