The United States on Wednesday imposed sweeping sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, in an effort to cut off funding for Moscow’s military operations and push toward an end to the war in Ukraine. The announcement by the Trump administration coincided with Russia conducting large-scale nuclear training exercises and came a day after Washington delayed plans for a second summit between President Donald Trump and Russian President Vladimir Putin.
The sanctions, unveiled by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC), target both companies directly as well as several of their subsidiaries. President Trump described the measures as “tremendous sanctions” and emphasized that they are intended to pressure Russia to negotiate peace, saying, “We hope that the war will be settled. I just felt it was time.”
According to OFAC, the sanctions were imposed due to Russia’s “lack of serious commitment to a peace process” to end hostilities in Ukraine. The Treasury Department stated that the measures aim to “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 statement stressed that permanent peace depends entirely on Moscow’s willingness to engage in good-faith negotiations. Treasury Secretary Scott Bessent also underscored the urgency of a ceasefire, noting that the sanctions are part of President Trump’s broader diplomatic effort.
Under the new executive order, Rosneft, a state-linked energy firm involved in exploration, refining, and global petroleum sales, and Lukoil, a privately held multinational operating in oil and gas exploration, refining, and distribution, are now fully blocked within US jurisdiction. OFAC has extended the restrictions to subsidiaries in which the companies hold a 50% or greater stake, prohibiting all US transactions unless explicitly licensed. Officials indicated that these measures could be the first phase of a wider financial campaign aimed at pressuring Moscow.
The Treasury also encouraged US allies to align with the sanctions to maximize their impact. In parallel, the European Union approved its 19th sanctions package against Russia, including the bloc’s first ban on Russian liquefied natural gas (LNG). Short-term LNG contracts will be phased out within six months, while long-term deals will end by January 1, 2027, accelerating the EU’s plan to reduce reliance on Russian fossil fuels. The EU package also imposes travel restrictions on Russian diplomats, sanctions 117 ships from Moscow’s “shadow fleet,” and targets banks in Kazakhstan and Belarus for aiding sanctions evasion.
These combined measures reflect an intensified international effort to weaken Russia’s economic capacity to sustain its war in Ukraine, signaling a coordinated push by the US and its allies to leverage financial and energy sector pressure as a path toward ending the conflict.
