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The United States has announced new sanctions targeting Russia’s largest oil producers amid growing tensions between President Trump and Russian President Vladimir Putin over the war in Ukraine.
Some shit you should know before you dig in: Yesterday, President Trump announced that his planned summit with President Putin in Budapest had been abruptly canceled, noting he did not want to “waste time” on a meeting that was unlikely to produce real progress toward peace. The decision came shortly after a tense phone call between Russian Foreign Minister Sergey Lavrov and US Secretary of State Marco Rubio, which was intended to finalize the details of the meeting. According to officials on both sides, the talks broke down when Russia refused to consider a ceasefire based on freezing the current front lines, instead insisting on territorial concessions from Ukraine as a precondition for negotiations.
What’s going on now: In a notable development, the Treasury Department officially hit Russia with a new round of sanctions aimed squarely at the country’s energy sector (a critical source of revenue for the Kremlin’s war effort). The sanctions specifically target Rosneft and Lukoil, Russia’s two largest oil companies, both of which are now designated for “operating or having operated in the energy sector of the Russian Federation economy.” The Treasury also blacklisted a wide network of subsidiaries connected to both firms, effectively choking off a major artery of cash that fuels Russia’s military operations. These companies are involved in everything from crude oil production and natural gas extraction to large-scale refinery operations and offshore drilling, with operations extending both inside and outside Russia.
According to the Treasury, Rosneft and Lukoil “directly fund the Kremlin’s war machine,” and cutting off their financial capacity is viewed as essential to halting the war. The action blocks all property and interests within the United States belonging to the designated entities and prohibits US persons from engaging in most transactions with them. It also effectively severs the companies from the US financial system and opens the door to secondary sanctions against foreign firms that continue doing business with them.
Treasury Secretary Scott Bessent said, “Now is the time to stop the killing and for an immediate ceasefire. Given President Putin’s refusal to end this senseless war, [the] Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine.” Speaking to reporters later at the White House, Bessent described the move as a “substantial pickup in Russia sanctions” and warned that further steps were being prepared. He added that the US would urge “our European and G7 allies plus Canada and Australia to come along with us.”
The sanctions are a direct response to what the Trump administration describes as Russia’s “lack of serious commitment to a peace process.” As of now, there has been no response from Russia.
