Editor’s note: Pavel Klachkov is a Russian political scientist, a Director of the branch of the Financial University under the Government of the Russian Federation. The article expresses the personal opinion of the author and may not coincide with the view of News.Az.
On November 21, 2024, the U.S. Department of the Treasury announced a comprehensive sanctions package targeting the Russian financial sector. At the center of attention is Gazprombank, a key participant in settlements for Russian pipeline gas. This measure marks a new stage in the strategy of economic pressure on Russia. The sanctions have sparked strong reactions not only within Russia but also in Europe, where many countries are now forced to rethink their energy strategies.
The new sanctions cover over 50 Russian banks, 40 securities registrars, and a significant number of financial officials. Gazprombank, which had previously remained outside the scope of Western restrictions, is now being targeted along with six of its foreign subsidiaries. This step not only disrupts established payment schemes for energy carriers but also challenges Russia’s entire financial architecture.
Sanctions against Gazprombank and the “gas for rubles” scheme
Gazprombank has long played a central role in gas payment settlements with Europe. The introduction of the “gas for rubles” scheme in 2022 minimized the impact of sanctions on Russian exports. Under this system, gas buyers in the EU opened special ruble and foreign currency accounts with Gazprombank through which transactions were processed. This mitigated the risk of payment blocks due to sanctions while maintaining the stability of supplies.
The new U.S. sanctions undermine this mechanism. American entities are now required to cease all operations with Gazprombank by December 20, 2024, creating significant challenges for market participants. However, the sanctions do not apply to diplomatic settlements or transactions related to agricultural products, medical equipment, and humanitarian activities. The exclusion of energy-related transactions from the licenses is clearly aimed at complicating payments for Russian gas.
Reactions to these measures have already followed. Hungarian Foreign Minister Péter Szijjártó stated that Budapest is studying the implications of the sanctions and is ready to consult with Russian gas suppliers. Hungary intends to continue meeting its energy needs despite external pressure.
Role of SPFS in the new reality
A critical aspect of the sanctions pressure is the blow to Russia’s Financial Message Transfer System (SPFS). Created by the Central Bank of Russia in 2014 as an alternative to SWIFT, SPFS has been actively promoted for international settlements in recent years. As of 2024, SPFS includes 570 participants, including 159 foreign organizations.
The U.S. Office of Foreign Assets Control (OFAC) issued a warning that any foreign financial institutions cooperating with SPFS could be added to sanctions lists. This warning increases pressure on potential participants, limiting the system’s development. On one hand, SPFS remains an important tool for ensuring the sovereignty of Russia’s financial system. On the other hand, growing risks for foreign partners reduce its effectiveness on the international stage.
Energy security: Challenges for Europe and Asia
Sanctions against Gazprombank strike not only at Russia but also at its major trading partners. In Europe, they pose a threat to the stability of gas supplies, especially during the winter period. Despite the EU’s stated goal of reducing dependence on Russian gas, finding quick alternatives remains challenging.
At the same time, Japan, one of the main buyers of liquefied natural gas (LNG) from the Sakhalin-2 project, received a general U.S. license allowing it to continue operations with Gazprombank within the framework of this project. This decision underscores the selective nature of U.S. sanctions policy: while European allies face growing risks, Asian partners like Japan enjoy privileges.
Japan has stated that the sanctions against Gazprombank will not affect its energy security. The general license permits transactions related to the Sakhalin-2 project until June 28, 2025. This enables Tokyo to not only maintain cooperation but also strengthen its energy stability.
A view shows a board with the logo of Gazprombank at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 16, 2022. REUTERS/Anton Vaganov/File Photo
Long-term consequences of sanctions
The consequences of sanctions against Gazprombank and SPFS extend far beyond the current crisis. Europe’s energy architecture will face significant challenges. U.S. attempts to limit settlements for Russian gas could lead to even higher energy prices. Meanwhile, Europe’s dependence on gas remains substantial, creating grounds for internal disagreements within the EU.
For Russia, the sanctions mean further isolation of its financial system from Western institutions. This could accelerate the development of alternative financial mechanisms, including SPFS, and stimulate a transition to settlements in national currencies with Asian and Middle Eastern partners. However, this process will require significant resources and time, complicating its implementation.
On a global level, U.S. sanctions increase tensions in international relations. Washington’s unilateral actions are increasingly criticized even among its allies, undermining trust in American policy.
Geopolitical escalation: Risk of conflict
Amid heightened sanctions pressure, the U.S. has taken another step that exacerbates tensions. The Ukrainian army has reportedly begun using American long-range weapons, including ATACMS missiles, to strike Russian territory. In response, Russia launched a strike on a missile plant in Dnipro using a hypersonic-equipped ballistic missile.
These developments underscore that the conflict in Ukraine has transcended regional boundaries, assuming a global dimension. Russia has warned of potential strikes on military facilities in countries supplying weapons to Ukraine. This points to an increased likelihood of direct confrontation between Russia and NATO.
An additional factor of tension is the transition of power in the United States. The Biden administration is using its final weeks in office to intensify pressure on Russia. The inauguration of Donald Trump, scheduled for January 20, 2025, could be accompanied by an escalation of the conflict. According to some analysts, the Democratic administration might even consider declaring a state of emergency to avoid transferring power.
Sanctions against Gazprombank and Russia’s financial sector have become a milestone in geopolitical confrontation. They underscore the U.S.’s determination to use economic pressure to achieve strategic goals. However, these measures have a downside: they create challenges for Washington’s allies, threaten global energy stability, and deepen divisions in international relations.
For Russia, the sanctions serve as a stimulus for developing domestic financial mechanisms and reorienting toward alternative markets. But the success of this strategy will require time and significant resources.
The future depends on whether the conflicting parties can find paths to de-escalation or whether the situation will continue to unfold along a trajectory of growing confrontation.
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