U.S. Targets Bank Execs And G7 Pledges To Cut Off Russian Oil

Topline

Members of the Group of Seven committed Sunday to banning or phasing out Russian oil imports, and the United States will sanction three of Russia’s biggest TV channels and 35 Russian banking executives, as part of the latest raft of sanctions against the Kremlin over its invasion of Ukraine.

U.S. President Joe Biden, German Chancellor Olaf Scholz and British Prime Minister Boris Johnson … [+] pose for a G7 leaders’ photo during a NATO summit on Russia’s invasion of Ukraine, at the alliance’s headquarters in Brussels, on March 24, 2022.

Henry Nicholls/Pool/Getty Images

Key Facts

The U.S. and the G7—a group of wealthy nations that includes the United States—settled on the latest round of sanctions and oil import restrictions following a Sunday meeting with G7 leaders and Ukrainian President Volodymyr Zelensky, the White House said.

The new U.S. sanctions target Kremlin-aligned TV stations Channel One Russia, NTV and Russia-1, all of which have broadcast material strongly supporting Russia’s war.

The policy bans U.S. companies from providing advertising money or broadcast equipment like cameras and microphones to the stations, which until now have been some of Russia’s largest recipients of foreign money, the White House said.

The U.S. sanctioned eight executives from Sberbank, Russia’s largest bank, and 27 executives from Gazprombank, Russia’s third-largest bank, which previously had not been affected by the sanctions imposed by U.S. and European officials against the Russian banking sector.

The White House announced visa restrictions against about 2,600 Russian and Belarusian military officials associated with the war against Ukraine, as well as the rollout of a visa restriction policy targeting Russian military officials and Russia-supported actors accused of human rights abuses in Ukraine.

The Biden Administration also said it would prohibit Americans from offering services in accounting, management consulting and other areas of business to people in Russia, a move the administration said would make it harder for Russian oligarchs to hide their wealth.

What We Don’t Know

The European members of the G7—France, Germany and Italy—are still finalizing a timeframe for banning Russian oil imports, a senior Biden Administration official said Sunday. German officials have indicated the country could phase out Russian oil by the end of the summer. The U.S. banned all Russian oil, liquefied natural gas and coal imports in March.

Key Background

Russia relies heavily on Europe for energy export revenue, and Europe relies heavily on Russia for its fuel supply. In February, as Russian troops massed near the Ukrainian border, Germany canceled the unopened $11 billion Nord Stream 2 pipeline, depriving Europe of 55 billion cubic meters per year of natural gas and Russia of tens of billions of dollars in potential gas revenue. Germany has balked at imposing strong sanctions on organizations like Gazprom because Germany depends on Russia for much of its fuel. However, Germany has quickly reduced its dependence on Russian energy over the past few months, striking a deal with Qatar in March to supply extra natural gas. Russia now accounts for 40% of German natural gas imports, down from 55% prior to the invasion, and for 25% of German oil imports, down from 35% prior to the invasion, Reuters reported in April. The U.S. is working with natural gas producers in Qatar and Australia to bolster Europe’s gas supply, a Biden Administration official said Sunday.

Contra

Though 27 Gazprombank executives were targeted by the new sanctions, the sanctions are not directed at the bank itself, which is owned by Gazprom, Russia’s largest natural gas exporter, a senior Biden Administration official told reporters. Some other major Russian banks, such as Sberbank and VTB Bank, have been sanctioned directly by the United States, preventing U.S. individuals from doing business with them.

Tangent

The new sanctions were released one day before Russia celebrates Victory Day, which commemorates the Soviet Union’s role in defeating Nazi Germany in World War II. The day of the Nazis’ surrender is commemorated in the U.S. as Victory in Europe Day, or V-E Day, and is observed one day before Russia’s celebrations.