The Biden administration is weighing the introduction of harsher sanctions against Russia’s oil trade, aimed at intensifying financial pressure on President Vladimir Putin’s regime as the war in Ukraine approaches its third year. The new measures, currently under deliberation, could target Russian oil exports more aggressively, including restrictions on the global buyers of Russian crude. This push comes just weeks before Donald Trump returns to the White House, with the administration seeking to maximize its leverage over Russia before any potential shifts in US foreign policy.

The proposed sanctions would follow a trend of escalating US efforts to weaken Russia’s economic foundations, particularly its oil revenues, which remain a crucial pillar of Putin’s war machine. Although the US already bans imports of Russian oil, the new sanctions could take a more direct approach by targeting Russia’s “shadow fleet” of tankers used to transport its oil to international markets. This would mark a shift from previous strategies that have focused on limiting oil sales via price caps and targeted financial measures.

While details of the new sanctions are still being finalized, the Biden administration is exploring options to impose restrictions similar to those imposed on Iranian oil where buyers of Iranian crude face US penalties. However, this approach carries significant risks for major countries like China and India as they are substantial consumers of Russian oil. Any attempt to curtail their access to Russian crude could provoke geopolitical tensions and spark a spike in global oil prices, further straining an already volatile energy market.

One of the key factors influencing the Biden administration’s decision-making is the upcoming shift in power with Trump’s return to office. The former president has expressed a desire for negotiations to end the war in Ukraine, and US officials are keen to strengthen Ukraine’s position in any future talks by making it more difficult for Russia to fund its war effort. By tightening sanctions before Trump’s inauguration, the Biden administration aims to maximize Russia’s economic difficulties. This could bolster Ukraine’s negotiating hand should peace talks take place.

This potential escalation in sanctions comes at a time when global oil prices are relatively low. The benchmark Brent crude was trading below $75 per barrel, compared to highs above $120 in the wake of Russia’s invasion of Ukraine. The US is seeking to exploit this softer market to further strain Russian finances while avoiding significant price hikes that could impact global economies.

The European Union is also preparing similar actions against Russia’s oil trade, including restrictions on the shadow fleet and additional sanctions targeting individuals involved in the oil trade. However, these measures could provoke backlash from countries that continue to rely on Russian energy. Hungary and Turkey have already warned that such actions could compromise energy security.

Despite these concerns, the Biden administration has already imposed sweeping sanctions on Russia’s banking sector, Gazprombank the last major Russian financial institution previously exempt from penalties. These efforts underscore Washington’s determination to curb Putin’s access to international markets and financing.