The Biden administration has imposed sweeping sanctions on more than 200 entities and individuals connected to Russia’s energy sector. This move is aimed at choking off revenue streams that fund Russia’s ongoing conflict in Ukraine. Among the entities penalized are two Indian companies, Skyhart Management Services and Avision Management Services, accused of violating U.S. sanctions by facilitating the transportation of liquefied natural gas (LNG) from Russia.
Announced on Friday, the sanctions target various actors in Russia’s energy production and export chain. Secretary of State Tony Blinken described the action as a necessary step to degrade Russia’s ability to fund its war. The sanctions block over 180 vessels, restrict U.S. services tied to Russia’s energy extraction, and target individuals and companies providing support to sanctioned Russian projects.
Why Indian Companies Are Facing Sanctions
Skyhart Management Services and Avision Management Services, two companies based in India, have been penalized for their roles in aiding Russian LNG exports from the Arctic LNG 2 project, a U.S.-designated entity. According to the U.S. State Department, both companies became operators of LNG carriers shortly before the vessels loaded gas from the Arctic LNG 2 facility.
Skyhart is linked to the LNG carrier MULAN, while Avision managed the vessel NEW ENERGY. These ships are accused of transporting LNG despite restrictions placed on the Arctic LNG 2 project by U.S. sanctions. Additionally, two other vessels, Pravasi and Ony, managed by Avision, have been flagged as blocked property by U.S. authorities.
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The State Department claims that these companies materially supported Russia by enabling the transport and export of its energy resources. Such actions, according to the U.S., undermine global efforts to cut off Russia’s financial capabilities to sustain its military actions in Ukraine.
Broader Sanctions and Their Impact
The sanctions go far beyond targeting the Indian companies. In a simultaneous move, the U.S. Department of the Treasury imposed restrictions on more than 150 additional entities and individuals, including major Russian oil producers Gazprom Neft and Surgutneftegas. Insurance companies and shadow fleet vessels—used to evade sanctions—were also blacklisted.
The Treasury issued a new rule prohibiting U.S.-related services that assist with the extraction and production of crude oil and petroleum products in Russia. This measure aims to block Russia’s access to key technology and expertise needed to maintain its energy sector.
These actions are part of a coordinated effort among the United States, the United Kingdom, and G7 nations to restrict Russia’s ability to generate revenue from its natural resources. The goal is to weaken its financial and logistical ability to sustain its war efforts in Ukraine. Officials estimate these sanctions could cost the Russian economy billions of dollars each month.
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The sanctions also extend to China-based subsidiaries of Novatek China Holdings Co. Ltd., a company involved in marketing LNG from Arctic LNG 2. The inclusion of Chinese companies signals a broader warning to global entities engaged with Russia’s energy sector.
Sending a Global Warning
The penalties imposed on Skyhart Management Services and Avision Management Services highlight the risks for any entity doing business with sanctioned Russian projects. The United States has made it clear that providing material or logistical support to Russia’s energy sector will not go unpunished.
By targeting companies involved in production, export, and logistical operations, the Biden administration aims to close loopholes and eliminate revenue streams for Russia. These sanctions are a strong signal to the international community that violations of sanctions will have severe consequences.
The comprehensive measures underscore the U.S. commitment to tightening restrictions on Russia’s economy while discouraging global entities from enabling its energy exports. For India-based companies like Skyhart and Avision, the sanctions serve as a reminder of the high stakes involved in dealings with sanctioned Russian entities.
