Biden's challenge: Hitting Putin while limiting energy pain

The big picture: "Biden is definitely in a tricky spot when it comes to crafting sanctions that will hurt Russia but not the American people," oil analyst Ellen Wald told Axios.

• Wald, a senior fellow with the Atlantic Council, said via email that directly hitting Russian energy "would cause dislocation throughout the global oil and gas marketplace."
• "The West has so far refrained from curtailing Russia's ability to market energy supplies...highlighting elevated concern about a price shock amid an extremely tight inventory situation and limited spare capacity," Barclays analyst Amarpreet Singh said in a note.
• U.S. gasoline prices are at their highest levels since 2014 and slated to climb further. They currently average $3.57-per-gallon, per AAA.

Catch up fast: The White House on Thursday announced sweeping new sanctions in coordination with the G7.

• They include new export controls and moving to cut off Russia's largest banks from Western financial systems.
• President Biden, in a White House address, also said the U.S. is working with other countries to evaluate additional releases from strategic oil stockpiles.

Zoom in: The sanctions address Russia's oil-and-gas sector to a limited degree via steps like restrictions on U.S. investors providing debt and equity to key Russian companies like Gazprom.

• But U.S. officials emphasized that they're not looking to crimp energy exports from Russia — Europe's largest gas and oil supplier — for now.
• "Our sanctions are not designed to cause any disruption to the current flow of energy from Russia to the world," deputy national security adviser Daleep Singh said at a White House press briefing Thursday.
• He acknowledged Russian energy's "systemic importance in the global economy."

Where it stands: Both Brent crude and U.S. prices fell back significantly Thursday afternoon after surging when the invasion began, though still remain at their highest levels by far since 2014.

• "A good deal of its recent rise was caused by uncertainty over whether Western leaders would impose sanctions on Russian oil and gas directly," Wald said, noting the price retreat yesterday stemmed from the White House signaling that would not happen for now.
• She added, however, that oil prices are still "higher than fundamentals indicate given the ongoing conflict and risk premium."

What they're saying: "I think what the Administration is trying to do is to sharpen all of the pain on the Russians. Denial of access to tech and finance is going to have a massively disproportionate effect on the Russians," said Richard Nephew, a sanctions expert with Columbia University's Center on Global Energy Policy, via email.

• "There is some risk of blowback, but it is much less than if we went over to top with our sanctions," added Nephew, who was previously the deputy special envoy for Iran in the Biden administration and a senior Obama-era sanctions official.
• "The issue is how we can help make the occupation as painful as possible so Russia withdraws. That's where these sanctions will come in," he said.

Yes, but: The efficacy of the effort remains unclear for now.

• As Axios' Emily Peck reported, Russia's been living with and maneuvering around sanctions for nearly a decade and has $630 billion in cash reserves to cushion the impact of the sweeping new restrictions.

What we're watching: The shape of additional sanctions that could follow. "Sanctions work better if you keep piling them on, day by day.  Every day needs to be a bad one in Moscow," Nephew said.