The United States on Wednesday imposed sanctions on Russia’s two largest oil firms, Rosneft and Lukoil, aiming to curb Moscow’s war funding and push for an end to the conflict in Ukraine.
The announcement by the Trump administration came as Russia conducted large-scale nuclear training exercises, a day after Washington delayed plans for a second summit between US President Donald Trump and Russian President Vladimir Putin.
The new measures, announced by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC), target both companies and several of their subsidiaries.
"These are tremendous sanctions. These are very big against their two big oil companies — and we hope that they won't be on for long. We hope that the war will be settled," President Donald Trump said. He added, "I just felt it was time."
Permanent peace depends on Russia, says US
In its official statement, OFAC said the sanctions were introduced due to Russia’s "lack of serious commitment to a peace process" aimed at ending the war in Ukraine.
"Today’s actions increase pressure on Russia’s energy sector and degrade the Kremlin’s ability to raise revenue for its war machine and support its weakened economy," the department said.
The Treasury emphasised that Washington remains committed to pursuing a diplomatic resolution but placed responsibility squarely on Moscow’s leadership. "A permanent peace depends entirely on Russia’s willingness to negotiate in good faith," it said.
The measures followed Treasury Secretary Scott Bessent signalling a "substantial pickup" in sanctions against Russia.
"Now is the time to stop the killing and for an immediate ceasefire," Bessent said in a written statement. He added that the sanctions were part of President Donald Trump’s broader diplomatic effort to end the war.
According to the Treasury, the move is designed to degrade Russia’s ability to fund its military operations and weaken its energy-dependent economy.
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Energy sector targeted under new executive order
The Treasury said both Rosneft and Lukoil are being designated for "operating or having operated in the energy sector of the Russian Federation economy". The decision effectively blocks all property and interests in property of the companies within US jurisdiction.
Rosneft, a state-linked vertically integrated energy firm, specialises in exploration, refining, and global petroleum sales. Lukoil, a privately held multinational, operates across oil and gas exploration, refining, marketing, and distribution within Russia and abroad.
OFAC also blacklisted several Rosneft and Lukoil subsidiaries, extending restrictions to any entity in which the sanctioned firms hold direct or indirect ownership of 50 per cent or more.
This means all transactions involving these entities are prohibited for US citizens and institutions unless explicitly licensed by the Treasury.
Officials indicated the latest sanctions could mark the beginning of a broader financial campaign. "Treasury will continue to use its authorities in support of a peace process," the statement added.
The United States has also called on its allies to align with the new measures. "We encourage our allies to join us and adhere to these sanctions," Bessent reiterated.
EU approves 19th package of Russian sanctions including LNG ban
The European Union also approved its 19th sanctions package against Russia, introducing the bloc’s first-ever ban on Russian liquefied natural gas (LNG).
Short-term contracts will be phased out within six months, while long-term deals will end by 1 January 2027, a year ahead of the European Commission’s original roadmap to end dependence on Russian fossil fuels.
The package also imposes new travel restrictions on Russian diplomats and adds 117 ships from Moscow’s “shadow fleet,” bringing the total to 558. Several banks in Kazakhstan and Belarus were also listed for aiding sanctions evasion.
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