The United States has announced new sanctions targeting Russia’s two largest oil companies, Rosneft and Lukoil, marking a significant shift in American foreign policy aimed at pressuring Moscow to negotiate a peace settlement in the ongoing conflict in Ukraine. This move comes amidst growing frustration over Russia’s unwillingness to engage in meaningful diplomatic talks, and just days after the United Kingdom imposed similar sanctions on the same companies. The European Union has also introduced its own measures, including a ban on imports of Russian liquefied natural gas (LNG) set to take effect from January 2027.
The announcement of the sanctions occurred shortly after US President Donald Trump revealed that a planned summit with Russian President Vladimir Putin, initially scheduled to take place in Budapest, would be postponed indefinitely. Trump expressed his disappointment with the Kremlin’s lack of progress on peace negotiations, stating, “Every time I speak to Vladimir, I have good conversations and then they don’t go anywhere.” Despite this setback, Trump emphasized that the sanctions were a necessary step to encourage Russia to halt hostilities, describing the package as “tremendous” and expressing hope that it could be reversed if Moscow agreed to cease the war.
This development marks a departure from Trump’s earlier stance, where he had been reluctant to impose sanctions on Russia’s energy sector until European nations stopped purchasing Russian oil. The Kremlin, however, dismissed the new sanctions, claiming that Russia was “immune” to their impact. Indeed, the immediate economic effect on Russia is expected to be limited, given the country’s vast reserves and diversified customer base, which includes China, India, and Turkey. Nevertheless, the symbolic significance of the US targeting Russia’s key oil firms signals a tougher approach from Washington.
Oil and gas exports constitute the backbone of Russia’s economy, with Rosneft alone accounting for nearly half of the country’s oil production—approximately 6% of global output according to UK government estimates. Together, Rosneft and Lukoil export around 3.1 million barrels of oil per day. US Treasury Secretary Scott Bessent underscored the rationale behind the sanctions, pointing out that these companies directly finance the Kremlin’s “war machine.” He stressed that the measures were necessary because of “Putin’s refusal to end this senseless war.”
The UK’s recent sanctions package on Rosneft and Lukoil was similarly designed to send a strong message about the unacceptable role of Russian oil in global markets. UK Chancellor Rachel Reeves declared that “there is no place for Russian oil on global markets,” while Russia’s embassy in London cautioned that targeting major Russian energy companies would disrupt global fuel supplies and drive up costs worldwide. The embassy also warned that such pressure “only complicates peaceful dialogue and leads to further escalation.”
Despite Europe’s significant efforts to reduce dependence on Russian fossil fuels since the outbreak of the war, Russian gas still constitutes about 13% of the European Union’s imports. The EU has pledged to phase out Russian gas entirely, and on Wednesday, European Commission President Ursula von der Leyen welcomed the new sanctions, including the LNG import ban by 2028. She highlighted that these collective actions from both sides of the Atlantic send a clear signal of unified resolve to maintain pressure on Russia.
While the US and European sanctions intensify, Russia continues to rely heavily on major customers such as China, India, and Turkey. President Trump has called on these nations to cease their purchases of Russian oil to increase economic pressure on Moscow. Reports from Reuters indicate that India is preparing to significantly reduce its imports of Russian oil following the US’s announcement. China, however, has voiced opposition to the sanctions, emphasizing its stance against unilateral punitive measures.
On the Ukrainian front, President Volodymyr Zelensky has been a vocal advocate for stronger sanctions against Russia, viewing them as a “good signal” from the US and a potential catalyst for a ceasefire. Zelensky’s administration has also targeted Russian oil refineries and energy infrastructure in recent months, attempting to weaken the Russian economy and its war capabilities.
Zelensky’s visit to the White House last Friday was aimed at securing long-range Tomahawk missiles capable of striking deep into Russian territory. However, he left without the weapons, as President Trump declined the request citing the missiles’ complexity and the extensive training required for their use. Zelensky appeared optimistic that, similar to the sanctions, the US might reconsider its position in the future.
The proposed meeting between Trump and Putin in Hungary was announced following