The United States has announced sweeping new sanctions targeting Russia’s two largest oil companies, Lukoil and Rosneft, in a bid to push Moscow toward negotiating a peace agreement in Ukraine.
The US Department of the Treasury’s Office of Foreign Assets Control confirmed Wednesday that the latest sanctions apply to both firms and several of their Russia-based subsidiaries.
The measures are designed to intensify pressure on Russia’s energy sector and limit the Kremlin’s ability to raise revenue for its ongoing war effort and support its struggling economy.
Treasury Secretary Scott Bessent said his department stood ready to escalate measures if needed.
“If necessary,” he said, the Treasury would take further action “to support US President Donald Trump’s effort to end the war”.
The move followed the indefinite postponement of a planned meeting between President Trump and Russian President Vladimir Putin in Budapest.
The US leader said he did not want a “wasted meeting”.
The sanctions have already stirred market volatility, with West Texas Intermediate prices surging 3.5 per cent to US$60.56 in early Thursday trade — extending gains from the previous session amid renewed fears of supply constraints.
Rystad Energy’s Head of Geopolitical Analysis, Jorge Leon, commented that the sanctions marked a major turning point in US policy toward Russia.
“The latest US sanctions on Russia’s largest oil producers represent a significant and unprecedented escalation in Washington’s pressure campaign against Moscow.
“The sharp rise in oil prices following the announcement underscores market fears that Russian crude exports – particularly to India, one of its key customers – could fall sharply.
Jorge Leon noted that the combination of recent attacks on Russian oil infrastructure and newly enacted sanctions could significantly disrupt Russia’s crude production and exports, which may force operators to shut down facilities unexpectedly.
Leon added that this escalating geopolitical tension could undermine the unity of OPEC+’s approach to increasing supply, and if Russia faces production hurdles, it would become both financially and politically untenable for Moscow to support further expansion in output under the group.
As Leon explained, this environment might revive divisions within OPEC+ as its members balance their need for stable markets with individual fiscal considerations amid growing uncertainty.
“The big question now is whether Washington’s latest sanctions will be enough to draw Moscow back to the negotiating table – and, if they fail to do so, what options remain to increase pressure without crossing the line into open confrontation,” said Leon.
