U.S. hits top Russian oil companies with sanctions, EU bans Russian LNG

U.S. President Donald Trump on Wednesday imposed Ukraine-related sanctions on Russia for the first time in his second term, targeting major oil producers Lukoil and Rosneft as his frustration with Russian President Vladimir Putin over the conflict deepens.

The announcement followed the European Union’s approval of its 19th sanctions package against Moscow, which includes a ban on imports of Russian liquefied natural gas (LNG). Britain also sanctioned Rosneft and Lukoil last week.

The U.S. Treasury Department said it stood ready to take further measures, urging Moscow to agree to an immediate ceasefire in its war on Ukraine, which began in February 2022.

“Given President Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine,” Treasury Secretary Scott Bessent said in a statement. “We encourage our allies to join us and comply with these sanctions.”

Oil prices rose by more than $2 a barrel following the announcement, with Brent crude climbing to around $64.

The move represents a significant policy shift for Trump, who until now had avoided direct sanctions on Russia over the conflict, preferring to rely on trade measures instead. Earlier this year, he imposed an additional 25% tariff on Indian goods in retaliation for New Delhi’s purchase of discounted Russian oil.

The U.S. has not introduced similar tariffs on China, another key buyer of Russian crude. Western nations’ $60 price cap on Russian oil, imposed after the invasion, has redirected Moscow’s exports from Europe to Asia.

Trump told reporters at the White House that he had cancelled a planned summit in Hungary with Putin, saying “it didn’t feel like the right time.” He added that he hoped the sanctions would be short-lived, noting his preference for removing such measures quickly to avoid undermining the U.S. dollar’s global dominance. Russia has frequently sought to conduct oil transactions in alternative currencies.

Analysts say move is significant but incomplete

Experts welcomed the decision but said more needed to be done.

“This can’t just be one and done,” said Edward Fishman, a former U.S. official now at Columbia University. “The question is whether the U.S. will go further and threaten sanctions on anyone still doing business with Rosneft and Lukoil.”

Jeremy Paner, a former Treasury Department sanctions investigator and now a partner at Hughes Hubbard & Reed, said that by leaving out banks and Indian or Chinese oil buyers, the sanctions “won’t get Putin’s attention.”

A senior Ukrainian official described the move as “great news,” noting that Kyiv had long urged Washington to target the two Russian energy giants.

The Treasury also sanctioned dozens of subsidiaries belonging to Rosneft and Lukoil, freezing any U.S. assets they hold and prohibiting Americans from conducting business with them.

Neither the Russian embassy in Washington nor Moscow’s mission to the United Nations in New York immediately responded to requests for comment.

EU cracks down on Russia’s ‘shadow fleet’

The EU’s LNG ban will be implemented in two stages: short-term contracts will be terminated after six months, while long-term deals will end from 1 January 2027 — a full year earlier than the European Commission’s original timetable to phase out Russian fossil fuels.

The new EU sanctions package also includes travel bans on Russian diplomats and the blacklisting of 117 additional vessels from Moscow’s so-called “shadow fleet”, mostly oil tankers, bringing the total to 558. The list also covers several banks in Kazakhstan and Belarus, according to the EU presidency.

EU diplomatic sources told Reuters that four Chinese oil-related entities would also be sanctioned, though their names would remain confidential until the package’s formal adoption on Thursday. These include two refineries, a trading company, and another entity accused of helping to circumvent restrictions on Russian oil and other sectors.

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