• Monday, March 04, 2024
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US, EU plan new sanctions to stop oil exploration


The United States and European Union plan to stop billions of dollars in oil exploration in Russia by through the world’s largest energy companies. The planned sanctions over Russia’s aggression toward Ukraine would ban US and European companies from cooperating with Russia on searching its Arctic territory, deep seas or shale formations for crude.

The measures, which one of the sources said represented “preliminary thinking,” would expand sanctions the Obama administration announced in July and ban US and EU cooperation on all energy services and technology in the unconventional oil fields. The previous sanctions only banned some technology at those locations.

Russia, along with the United States and Saudi Arabia, is one of the world’s top oil producers and is the main energy supplier to Europe. But its conventional oil fields are in decline, so it must move to frontier sources in Siberia and the Arctic to keep the oil flowing.

The new sanctions, if applied, would be harmful to Russia’s future prospects because they would target fields five or 10 years from producing oil. But application of the sanctions could be prevented if Russia sticks to a cease fire, and depends on several factors including actions by the EU.

Any new sanctions on services and technology related to Russia’s oil frontier would signal that the United States and EU are “taking the gloves off and are aiming directly at the major source of Russia’s potential future energy production growth,” said Robert McNally, a White House energy adviser to former President George W. Bush.