US Russia Sanctions - Oil /Petroleum Prohibitions

On 8 March 2022 President Biden signed into law new Executive Order Prohibiting Certain Imports And New Investments With Respect To Continued Russian Federation Efforts To Undermine the Sovereignty And Territorial Integrity Of Ukraine.

This imposes new US prohibitions against the following activities:

    i. the importation into the United States of the following products of Russian Federation origin: crude oil; petroleum; petroleum fuels, oils, and products of their distillation; liquefied natural gas; coal; and coal products;

    ii.new investment in the energy sector in the Russian Federation by a United States person, wherever located; and

    iii. any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a United States person or within the United States.

It should be noted that (ii) and (iii) refer to activities “by a United States person” whereas (i) does not. This would suggest that the importation prohibitions apply to ANY person. The prohibitions in (i) apply to imports of Russian Federation-origin products, meaning that indirect imports are captured, not just those directly from the Russian Federation.

The US has at the same time issued a general license permitting the winding-down of existing commitments through to 22 April 2022. This is a relatively short winding-down period, and could mean that in some cases existing contracts will not be capable of being performed by the end of the specified period.