U.S. and EU Include Key Oil Companies in New Sanctions Targeting Russia

Latest Developments

• Rosneft and Lukoil Targeted: The United States imposed sanctions on Russia’s two largest oil companies as President Donald Trump expressed frustration with Russian President Vladimir Putin, observing, “Every time I speak with Vladimir, I have good conversations, and then they don’t go anywhere.” The Treasury Department, citing “Russia’s lack of serious commitment to a peace process to end the war in Ukraine,” announced sanctions on Rosneft and Lukoil as well as their subsidiaries. Together, Rosneft and Lukoil account for approximately 55 percent of Russia’s oil production. Treasury threatened to impose similar sanctions against any foreign parties, including financial institutions, that continue to do business with Rosneft or Lukoil. The same two companies were sanctioned by the United Kingdom days earlier.
• EU Imposes Sanctions To ‘Keep Up Collective Pressure’: In tandem with the United States, the European Union imposed a raft of new sanctions targeting Russia on October 23, including an eventual ban on importing liquefied natural gas and additional sanctions on Rosneft. The package also sanctions more than 100 Russian “shadow fleet” vessels, two Chinese refineries and a Chinese oil trader that buy “significant” amounts of Russian crude, and banks and crypto exchanges. “This is a clear signal from both sides of the Atlantic that we will keep up collective pressure on the aggressor,” stated European Commission President Ursula von der Leyen.
• ‘Act of War’: Russian Foreign Ministry spokeswoman Maria Zakharova told reporters that Russia “has developed a strong immunity to Western restrictions” and that the new sanctions would be “counterproductive” to peace negotiations. But former Russian President Dmitry Medvedev, currently the deputy chair of Russia’s National Security Council, called it an “act of war against Russia.” U.S. Treasury Secretary Scott Bessent broadcast the move shortly before the new measures were announced, stating that the United States was poised for “a substantial pickup in Russia sanctions.”

FDD Expert Response

“The Trump administration is finally dropping the hammer of American economic power where it’s needed most: onto Russia’s oil economy. Treasury is targeting the Kremlin’s war chest by sanctioning Rosneft and Lukoil. It’s also warning banks: if you do business with them, you could face the same penalty.” — Peter Doran, Adjunct Senior Fellow

“The administration has finally moved to impose direct sanctions on Moscow — a first since the start of President Trump’s second term — and the targets are anything but symbolic. Rosneft and Lukoil are Russia’s two largest oil producers, together accounting for roughly 5 percent of global oil flows. These designations carry far-reaching implications, including serious secondary sanctions risks for any foreign bank or trader still doing business with Rosneft, Lukoil, or any of the more than 30 subsidiaries added to the sanctions list today. The move also signals that Trump believes Putin has crossed a red line by failing to negotiate in good faith to end the war against Ukraine.” — Max Meizlish, Senior Research Analyst

“By targeting Russian oil revenue, the Trump administration has struck at the heart of Moscow’s war economy. The impact of these new sanctions will hinge largely on U.S. enforcement. Russia and its oil customers will no doubt develop schemes to try to skirt sanctions. Treasury must aggressively pursue violators to make it as hard as possible for Moscow to continue the war.” — John Hardie, Russia Program Deputy Director

FDD Background and Analysis

“‘Russia Does Not Feel Enough Pressure’: Ukraine Bombarded Over 2 Deadly Nights as Trump Sours on Meeting With Putin,” FDD Flash Brief

“Letter to the POTUS,” by Clifford D. May

“Saving lives in Ukraine will require Trump to play the strong cards at his disposal,” by Peter Doran and Dmitriy Shapiro

“5 Ways the United States and Europe Must Help Ukraine Now,” by RADM (Ret.) Mark Montgomery