Biden's Russia sanctions may let Moscow profit from oil, gas

There is a glaring carve-out in President Joe Biden's sanctions against Russia: Oil and natural gas from that country will continue to flow freely to the rest of the world and money will keep flowing into Russia.

Following Russia's invasion of Ukraine, Biden defended his decision to preserve access to Russian energy in order “to limit the pain the American people are feeling at the gas pump.” But some academics, lawmakers and other analysts say that excluding an industry at the heart of the Russian economy essentially limits the sanctions and could embolden Russian President Vladimir Putin.

“Energy exports are the whole game,” said Columbia University historian Adam Tooze, an expert on finance and European politics. Politicians in the United States and Europe chose to “carve out the one sector that might truly be decisive. I don't think Russia is blind to what is going on and it must indicate to them that the West does not really have the stomach for a painful fight over Ukraine.”

As part of a broader international push, Biden announced sanctions on Thursday that target Russian banks and the country's elites, and restrict the export of vital technologies that are key for the military and economic development. The U.S. and its European allies intensified the sanctions on Saturday by announcing plans to freeze the reserves of Russia's central bank and block certain financial institutions from the SWIFT messaging system for international payments.

But the rules issued by the Treasury Department allow Russian energy transactions to keep going through nonsanctioned banks that are not based in the U.S. And administration officials stress that the sanctions are designed to minimize any disruptions to the global energy markets.

U.S. crude oil prices closed Friday just below...