The United States is now very open to considering sanctions against Russia's oil and gas sector, White House Press Secretary Jen Psaki said on Wednesday.
"We're considering it. It's very much on the table, but we need to weigh what all of the impacts will be," Psaki told MSNBC in an interview today.
The comments from the White House press secretary come a week after a senior U.S. State Department official said that the U.S. sanctions that were imposed on Russia for recognizing two breakaway regions in eastern Ukraine, as well the sanctions could be imposed in the near future, were not targeting and would not target oil and gas flows.
However, days after Vladimir Putin recognized the two regions, he launched a full-blown war in Ukraine, invading Russia's neighbor by land and sea and shelling cities with airstrikes.
The U.S. and its allies from the EU and the UK slapped more sanctions on Russia, Putin, the Russian oligarchs, banks, and the central bank, over the Russian invasion of Ukraine. The Western countries banned several Russian banks from the international SWIFT banking system, imposed sanctions on the Russian central bank's operations outside Russia, and on the Russian Direct Investment Fund (RDIF), the sovereign wealth fund, in an attempt to cut off Putin from accessing Russia's foreign assets.
"We're not trying to hurt ourselves, we're trying to hurt President Putin and the Russian economy," Psaki told MSNBC on Wednesday.
Although Russian oil and gas is currently technically spared from sanctions, the SWIFT ban and the concern that more sanctions would follow have made oil buyers reluctant to deal with Russian cargoes. Some refiners and traders are uncertain how the bank credits would work; others are staying away to avoid reputational damage.
"Because of the banking sanctions we've estimated about 70% of Russian crude oil exports can't be touched. That's about 3.8 million bpd," Amrita Sen,
Director of Research at Energy Aspects, told CNBC's Pippa Stevens on Wednesday.
By Tsvetana Paraskova for Oilprice.com
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