U.S. Eyeing Russian Energy Sanctions Over Ukraine War, Officials Say

“The advantage of a straight price cap is you go to the Chinese or the Indians and you say, we’re going to force you to save money!” mentioned Daniel Fried, a retired diplomat who has served because the State Department’s coordinator for sanctions coverage.

The hardest sanction imposed by the United States and European Union on Russia to this point has blocked the Russian central financial institution’s entry to overseas foreign money reserves in international accounts. That led to a plummet within the worth of the ruble. But the financial institution has amassed overseas foreign money from Russian corporations which are paid in {dollars} and euros for commodities, together with power.

U.S. and European officers have centered discussions on oil sanctions, leaving out the thornier question of Russian pure fuel exports. European nations depend on Russian fuel to warmth houses and energy companies, and it can’t be simply changed.

There are indicators that enormous Chinese state-owned oil corporations are holding back on signing new oil contracts with Russia, given the uncertainty over sanctions. American officers say that whereas China has given diplomatic and rhetorical assist to Mr. Putin, Chinese corporations and the federal government haven’t despatched financial or navy support to Russia.

Chinese corporations is perhaps ready till Russian commodity costs fall additional earlier than signing new contracts. And in addition they wish to keep away from secondary sanctions, mentioned Alexander Gabuev, a senior fellow on the Carnegie Endowment for International Peace. Chinese corporations usually are not effectively versed in sanctions compliance, he added, so the executives are inclined to err on the facet of warning.

The Biden administration can be discussing one other solution to inflict ache on Russia: legally seizing the Russian central financial institution property that have been frozen in accounts abroad through the warfare, in addition to these of Russian tycoons, and giving them to Ukraine for reconstruction, U.S. officers say.

As with the proposed power sanctions, the United States is exploring the thought with European nations and members of the Group of seven.

Edward Wong reported from Berlin, Paris and Washington, and Michael Crowley from Washington. Alan Rappeport contributed reporting from Königswinter, Germany, and Matina Stevis-Gridneff contributed from Brussels.