Trump’s New Sanctions on Russian Oil Companies

US Sanctions on Russian Oil Majors Aim to Get Putin to Negotiate

The Trump administration announced sanctions on Russia’s largest oil producers, including state-run Rosneft and privately held Lukoil, citing Russia’s lack of commitment to a peace process in Ukraine. The move represents a sharp policy U‑turn from President Trump, who had earlier signaled reluctance to impose major energy sanctions. Oil prices jumped on the news, and Ukraine welcomed the decision, though experts caution the measures may have limited short‑term impact on Putin’s war calculus because many Russian barrels could still reach markets and sanctions often take time to bite.

Key points

• The U.S. Treasury blacklisted Rosneft and Lukoil as part of the first major package of financial sanctions under the Trump administration aimed at pressuring Russia over the war in Ukraine.
• The decision marks a reversal of Trump’s previous stance against major Russia energy sanctions and departs from prior Western strategies (e.g., G7 price caps) intended to limit Kremlin revenues without disrupting flows.
• Oil prices rose (Brent up ~3% to about $64/barrel) amid renewed fears of supply disruption; the sanctions add pressure on global markets and buyers such as India’s refiners.
• Experts warn the sanctions may not quickly change Putin’s behavior: many Russian exports may still find buyers and sanctions typically have slow or circumvention-prone effects.

EU Sanctions Complement US Ones on Russia

The EU announced a new (19th) sanctions package against Russia over the Ukraine war that, for the first time, targets Russia’s gas sector by banning Russian LNG imports and also hits banks, crypto exchanges and entities linked to India and China. The move follows U.S. sanctions on major Russian oil firms Rosneft and Lukoil announced by President Trump. European leaders described the measures as a decisive step to cut Moscow’s energy revenues and maintain pressure. Oil prices rose ~3% after the announcements.

Key points

• EU adopted new sanctions including a ban on Russian LNG imports and penalties on banks, crypto platforms and related entities.
• The U.S. separately sanctioned Rosneft and Lukoil, a major policy shift that European officials welcomed.
• EU Leaders (von der Leyen, Kaja Kallas, Lars Løkke Rasmussen) framed the measures as aimed at depriving Russia of war funding and keeping pressure high.

Pressure Putin to Return to Negiating Table to End Ukrainian War

U.S. President Donald Trump imposed Ukraine-related sanctions on Russia’s two largest oil companies, Rosneft and Lukoil. Together they produce roughly half of Russia’s oil output and have significant domestic refining volumes and international ties—Rosneft with major long-term deals and stakes in Indian refiners, and Lukoil operating large projects such as Iraq’s West Qurna 2.

In short, Trump and EU leaders hope to kill off funding of the Russian war effort in Ukraine in order to get Putin back to the negotiating table. Sanctioning Rosneft, Lukoil and their networks is among the most consequential steps the U.S. has taken against Russia’s energy sector. It raises the cost of Moscow’s war effort, complicates Russia’s ability to monetize hydrocarbons, and sends a clear political signal of sustained pressure. At the same time, the measures create near-term risks for global energy markets and spur efforts to circumvent restrictions. The ultimate impact will depend on enforcement rigor, allied coordination, and how market participants adapt.

Key points:

• Sanctions target Rosneft and Lukoil, Washington’s toughest business measures related to the Ukraine war.
• Rosneft (led by Igor Sechin) produced 184 million tonnes (≈3.7 million bpd) in 2024, earned 1.08 trillion roubles, and refined 82.6 million tonnes domestically.
• International links: 10-year supply deal with Reliance (≈500,000 bpd) and 49% stake in Nayara/Vadinar refinery.
• Lukoil produced 80.4 million tonnes in 2024, earned 848.5 billion roubles, and refined 54.3 million tonnes domestically.
• International links: 75% stake in Iraq’s West Qurna 2 field (production reported >480,000 bpd).
• Together they account for about half of Russia’s oil production and a notable share of global output (Rosneft ≈3.3% of global oil).
• Russian economy and fiscal revenues: Rosneft and Lukoil are major sources of export earnings and tax receipts. Restrictions that limit their ability to sell, insure, finance or transport oil could reduce government revenues and constrain Moscow’s capacity to sustain military spending and social programs. Over time, reduced investment in upstream projects would also weaken long-term production prospects.
• Circumvention and secondary effects: Russia has pathways to reroute sales via alternative buyers, intermediaries, or barter arrangements. Sanctions often spur attempts at creative workarounds — for example, selling through third-country trading houses, using non-Western insurers and banks, or offering heavy discounts. Targeting a broad network of subsidiaries and service providers makes circumvention harder but does not eliminate the risk.