The outgoing administration’s recent decisions suggest that their overarching goal is to create as many problems as possible for its successor in every area. This applies both to foreign policy, where a policy of maximum escalation has been observed in virtually every conflict zone, as well as the domestic front.
With mere hours now left in Biden’s term, the most effective tool in the waning days of his presidency has been sanctions, which can be quickly imposed but are difficult to revoke, given their political justifications.
"Today, the US Department of the Treasury took sweeping action to fulfill the G7 commitment to reduce Russian revenues from energy, including blocking two major Russian oil producers. Today’s actions also impose sanctions on an unprecedented number of oil-carrying vessels, many of which are part of the 'shadow fleet,' opaque traders of Russian oil, Russia-based oilfield service providers, and Russian energy officials," the Treasury said in a press release last week announcing new sanctions against Russia's oil and gas sector.
"The United States is taking sweeping action against Russia’s key source of revenue for funding its brutal and illegal war against Ukraine," Treasury Secretary Janet Yellen said.
"This action builds on, and strengthens, our focus since the beginning of the war on disrupting the Kremlin’s energy revenues…With today’s actions, we are ratcheting up the sanctions risk associated with Russia’s oil trade, including shipping and financial facilitation in support of Russia’s oil exports," Yellen added.
But Team Biden's sloganeering about the sanctions' purpose being ‘continuing support for Ukraine’ is just cynical ideological cover for their true goal: disrupting the president-elect's plans, primarily in the economic and social sphere. As for hurting Russia, that won't work, and here's why.
Russian Maritime Oil Exports: The Math
US sanctions will result in a significant bump in global oil prices, simultaneously offsetting the drop in production volumes by making up revenues into the Russian budget.
Russia’s maritime exports of oil and petroleum products amount to about 5.8 million barrels per day, of which 3.5 million barrels per day are crude oil.
Currently, global energy agencies and international banks predict a surplus in the oil market in 2025 averaging 0.8 million barrels per day.
The consensus forecast for Brent crude prices in 2025 stands at about $71 per barrel, according to major banks.
Maritime Export of Russian Crude Oil by Destination Country (million barrels per day)
A complete halt to Russian maritime exports of oil and petroleum products (that is, a reduction in Russian oil production by that volume) would cause one of the largest-ever deficits in the global oil market in history (assuming oil production dynamics in other countries remain consistent with forecasts).
Consequently, the loss of such a significant volume of Russian exports (5.8 million barrels per day) from the global balance would lead to an increase in oil prices by $80–$90 per barrel, to $150–$160 per barrel.
The loss of far smaller amounts of Russian oil from the world market has already had devastating and immediate impact. In 2022, for example, when Russian oil and petroleum product exports dropped by 1.5 million barrels per day, oil prices rose to over $120 per barrel.
Crunching the numbers, with Brent crude priced at $158 per barrel, the export price of Russian oil for taxation purposes would be between $147 and $156 per barrel (depending on the size of the discount for Russian oil delivered via pipelines) compared to the roughly $70 per barrel assumed in the 2025 budget plan.
That means that under conditions of a full embargo on maritime oil exports, Russia's state budget revenues would increase (to $88.2 billion, compared to $82.3 billion under the current plan), despite a reduction in production and various associated costs.
Consequences for Trump's MAGA Energy Plans
One of President-Elect Trump’s key campaign promises has been to turn the United States into an oil superpower, and dominate global markets by removing all barriers to production, thereby lowering the price of oil to $50 per barrel or less.
This chart shows an almost 100% correlation between crude oil prices and retail gasoline prices in the United States.
Simple calculations show that with the "successful" implementation of Biden's new oil sanctions, the retail gasoline price at gas stations could rise to $4.90 per gallon or more. The idea is to force Trump to take responsibility for these exorbitantly high gas prices.
Driving the point home that Biden's energy sanctions were aimed at Trump, rather than Russia, just five days before their announcement, the president imposed what could be described as "anti-American" restrictions on energy by officially banning oil and gas drilling along the Atlantic and Pacific coasts of the United States.
Trump called the decision "ridiculous" and promised to "unban it immediately" after returning to the Oval Office.
What he does regarding the sanctions targeting Russian maritime oil sales, which this analysis has demonstrated will also harm the US, remains to be seen.