(Dec 19): The UK government imposed sanctions on three smaller Russian oil producers, as a US-brokered peace deal between Moscow and Kyiv remains elusive.
Tatneft PJSC, Russneft PJSC and NNK PJSC were sanctioned for “obtaining a benefit from or supporting the government of Russia” by operating in the energy segment, the UK Office of Financial Sanctions Implementation said in a statement on Thursday.
Tatneft is partly owned by the government of the Russian region of Tatarstan. The NNK chief executive officer is former Rosneft PJSC head Eduard Khudainatov, while Russneft has links to the family of Russian billionaire Mikhail Gutseriev.
Western nations have imposed multiple rounds of sanctions against the Russian oil and gas (O&G) industries in a move to curtain the Kremlin’s energy revenues, a key source of funds for the war in Ukraine. However, the restrictions have not shifted President Vladimir Putin’s stance.
Still, the Western restrictions have widened the discount of Russian oil prices to the Brent benchmark, and created logistical and financial hurdles for exports. The Russian government expects O&G tax revenues this year to drop to the lowest since the pandemic of 2020.
The latest UK package also included sanctions on oil trading tycoon Murtaza Lakhani, days after a new curbs package by the European Union, which also hit the Pakistani trader.
Russia classified its oil-output statistics in 2022, making it difficult to estimate the share of each individual producer. Tatneft, Russneft and NNK in the first half of this year accounted for less than 5% of Russia’s crude oil exports to the main markets, according to Bloomberg estimates.
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In October, the UK imposed sanctions on two top Russian oil producers, Rosneft and Lukoil PJSC, a move that the US followed just days later. At the start of this year, both the UK and the US blacklisted Gazprom Neft PJSC, the oil arm of gas giant Gazprom PJSC, and Surgutneftegas PJSC. In total, the UK-sanctioned Russian producers accounted for almost 60% of Russian oil exports to main markets in the first half of the year, according to Bloomberg estimates.
The Kremlin envoy Kirill Dmitriev is set to visit Miami this weekend to meet with Steve Witkoff and Jared Kushner for discussions on the potential peace deal, according to Axios.
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