New Plan to Target Russia’s Oil Revenue Brings Debate in White House

Officials in President Biden’s Treasury Department have proposed new actions aimed at crippling a fleet of aging oil tankers that are helping deliver Russian oil to buyers around the world in defiance of Western sanctions.

Their effort is aimed at punishing Russia but it has stalled amid White House concerns over how it would affect energy prices ahead of the November election.

In an attempt to drain Russia of money needed to continue fighting its war in Ukraine, the United States and its allies have imposed penalties and taken other novel steps to limit how much Moscow earns from selling oil abroad. But Russia has increasingly found ways around those limits, raising pressure on the Biden administration to tighten its enforcement efforts.

Treasury officials want to do that, in part, by targeting a so-called shadow fleet of oil tankers that is allowing Russia to sell oil above a $60-per-barrel price cap that the United States and its allies imposed in 2022.

That cap was intended to restrict Moscow’s ability to profit from its energy exports while allowing its oil to continue flowing on international markets to prevent a global price shock. But Russia has largely circumvented the cap, allowing it to reap huge profits to fund its war efforts.

While Treasury officials want to knock Russian tankers out of commission, economic advisers inside the White House worry that would risk inflaming oil prices this summer and push up U.S. gasoline prices, which could hurt Mr. Biden’s re-election campaign. They have not signed off on the proposals, even as current and former Treasury officials present them with analyses suggesting the risks of a major effect on the oil market are low.