Amidst the holiday season, the US Treasury’s Office of Foreign Assets Control (OFAC) made a quiet yet impactful move allowing the sanctioning of foreign financial institutions involved in supplying critical items to Russia’s military according to the report of CEPA. This determination could significantly impact Russia’s military production particularly in the ongoing conflict in Ukraine.

Focus on Industrial Tools and Chemicals

The OFAC’s authorization targets key components of Russia’s military-industrial base, including CNC machines, lubricants, and precision bearings. It signals a potential shift towards sanctions not just on financial facilitators but also on trans-shippers, intermediate companies, and manufacturers supporting Russia’s war machine.

A notable emphasis is placed on turbine lubricants and additives, revealing a vulnerability in Russia’s industrial landscape. The shortage of lubricant additives, often sourced from American or European companies, poses a challenge to Russia’s lubricant production. China has stepped in, but the dependence on Western suppliers remains evident.

The determination suggests a broader strategy to target Russia’s industrial weaknesses, from chemicals like lithium to critical components like antifreeze. By restricting access to essential industrial tools and chemical precursors, the US government aims to hinder Russian military-related production.

READ ALSO: U.S. Channels Billions from Russia to Aid Ukraine Amid Escalating Conflict

Impact on Russian Chemical Industry

The focus extends to chemicals, with instances like propylene glycol production where Russia previously relied on imports. SIBUR, a major Russian chemical giant is mentioned, emphasizing the potential impact of sanctions on critical chemicals.

Import records reveal Russian chemical companies’ continued reliance on foreign equipment and precursors. The absence of sanctions on key players raises questions about indirect support to Russia’s military endeavors by Western and Asian companies.

The urgency lies in swift and decisive action by the US and allies to impose new sanctions, especially on industrial tools and chemical precursors. The potential to cripple Russia’s military-related production underscores the significance of the OFAC determinations.

READ ALSO: Putin’s Navy Issues Warning on US Warships’ ‘Serious Threat’ to Russia