Russian President Vladimir Putin remained defiant on Thursday after U.S. President Donald Trump imposed sanctions on Russia’s two largest oil companies in an effort to pressure the Kremlin to end the war in Ukraine, a move that sent global oil prices soaring by 5%.

The sanctions prompted China’s state-owned oil majors to temporarily suspend Russian oil purchases, according to trade sources quoted by Reuters. Industry insiders also said refiners in India, the biggest buyer of Russian seaborne oil are preparing to sharply reduce their crude imports.

The measures target energy giants Rosneft and Lukoil, which together produce more than 5% of the world’s oil. The decision marks a dramatic reversal by Trump, who just last week said he and Putin would soon hold a summit in Budapest aimed at ending the conflict in Ukraine.

Although the sanctions are expected to have a limited short-term financial effect on Russia, they signal Trump’s intent to squeeze the Kremlin’s finances and force it towards a peace settlement in the nearly three-and-a-half-year-old full-scale invasion.

Putin dismissed the sanctions as a hostile act, insisting they would not seriously harm Russia’s economy while emphasising its vital role in the global energy market. He warned that any significant reduction in supply would drive up prices, creating problems for countries such as the United States.

“This is, of course, an attempt to put pressure on Russia,” Putin said. “But no self-respecting country and no self-respecting people ever decide anything under pressure.”

Asked later about Putin’s remarks, Trump told reporters: “I’m glad he feels that way. That’s good. I’ll let you know about it in six months from now.”

As Ukraine continues to press its allies for long-range missiles to shift the balance of the conflict, Putin warned that any attacks deep inside Russian territory would provoke a “very serious, if not overwhelming” response.

Trump’s latest reversal

In his latest shift on the conflict, Trump announced on Wednesday that the planned summit with Putin had been cancelled, saying it “didn’t feel right” and that his earlier “good conversations” with the Russian leader had failed to deliver results.

“We cancelled the meeting with President Putin, it just didn’t feel right to me,” Trump said at the White House. “It didn’t feel like we were going to get to the place we have to get. So I cancelled it, but we’ll do it in the future.”

Putin suggested that Trump most likely meant the meeting had been postponed. The two leaders last met in Alaska in August.

Russia has reiterated that its conditions for ending the war, terms viewed by Kyiv and many European governments as tantamount to surrender remain unchanged.

The conflict continued as EU leaders and Ukrainian President Volodymyr Zelenskyy met in Brussels to discuss funding for Ukraine.

EU leaders agreed to cover Ukraine’s urgent financial needs for the next two years but stopped short of explicitly supporting the use of frozen Russian assets to provide Kyiv with a large loan, after objections were raised by Belgium. Moscow warned it would deliver a “painful response” if the assets were seized.

Zelenskyy urges greater pressure

President Zelenskyy welcomed the new U.S. sanctions as “very important,” but said more pressure was needed on Moscow to push it towards agreeing to a ceasefire.

After his August summit with Putin, Trump dropped his insistence on an immediate ceasefire and backed Moscow’s preference to move directly towards negotiating a wider peace settlement. But in recent days, he has returned to supporting an immediate ceasefire, a position favoured by Kyiv but repeatedly rejected by Moscow, which argues it now has the upper hand on the battlefield.

Russia maintains that a ceasefire would merely provide Ukraine with time to rearm, calling it a temporary pause before renewed fighting.

Separately, Lithuania, an EU and NATO member, said two Russian military aircraft briefly violated its airspace on Thursday, prompting a diplomatic protest and a response from NATO forces. Moscow denied the incident.

EU targets Russian LNG

In another effort to deprive Moscow of revenue, the European Union adopted its 19th sanctions package against Russia on Thursday, banning imports of Russian liquefied natural gas (LNG) and targeting entities including Chinese refiners and Central Asian banks.

The EU has reduced its dependence on Russian energy by around 90% since 2022, when the conflict began, yet still imported more than €11 billion worth of Russian energy in the first eight months of this year. LNG now represents the EU’s largest remaining energy import from Russia.

Oil and gas revenues, down 21% year-on-year, account for roughly one-quarter of Russia’s state budget and remain its main source of funding for the war in Ukraine, now in its fourth year.

However, as Moscow derives most of its revenue from production taxes rather than exports, the immediate impact of the sanctions on government finances is expected to be limited.

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