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America and European Union are killing Russia With another round of sanctions aimed at cutting off the oil and gas export earnings that finance Moscow’s war against Ukraine.
More than 3 1/2 years into the war, the effort remains a cat-and-mouse game, with Russia finding new ways to avoid sanctions, and Washington and Brussels adding new methods and looking for ways to close enforcement gaps.
The main targets of the latest round: Russia’s largest oil companies, Rosneft And LUKOIL. The new US Treasury sanctions threaten their customers in India and China with retaliation, which could also include imposing sanctions themselves.
Meanwhile, the European Union is phasing out by the end of next year those shipments of Russian liquefied natural gas that come by ship, and going after cryptocurrency issuers, platforms and exchanges that Russia has used to avoid sanctions on its financial transactions with the outside world.
US Treasury Secretary Scott Besant said the move was aimed at pushing the Russian President Vladimir Putin agree with the president donald trumpProposes “immediate ceasefire” in Ukraine.
“Given President Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine,” he said, adding, “Treasury stands ready to take further action if necessary.”
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Taking aim at oil, the pillar of Russia’s state finances
About half of Russia’s oil exports are owned by Rosneft and Lukoil, which have supplied 30% to 50% of state revenues over the past decade with natural gas and oil products. The largest customers of Russian oil are China, at about 2.1 million barrels per day, and India, at 1.5 million barrels.
Refineries in India and China that buy Russian oil to turn into gasoline and diesel could potentially face U.S. sanctions if they deal with those companies, and their banks could do the same.
“Being hit by US sanctions, even secondary sanctions, is tantamount to a death sentence for the private sector,” said Maria Perrotta Berlin, a sanctions expert at the Stockholm Institute of Transition Economics.
As a result, India’s leading refinery, Reliance Industries’ Jamnagar facility, may reconsider its 600,000 barrels per day of Russian crude imports and is likely to “pause or pause” shipments, said Johannes Rauball, senior crude analyst at data analytics firm Kpler. Barrels purchased without Russia may end up in storage or seek another customer at a discount to the price, he said. “This puts Russia in a difficult position.”
US oil prices rose 5% to $61.44 a barrel on Thursday and international benchmark Brent rose 4.7% to $65.52. A Treasury spokesperson, who spoke on condition of anonymity to preview the restrictions, said the latest action is not expected to have a significant impact on energy costs for U.S. consumers, and the Treasury expects prices to remain stable.
Chris Weafer, CEO of Macro-Advisory Ltd. consultancy, said the biggest takeaway was Trump’s willingness to add to sanctions imposed under the Biden administration.
“This is the first set of sanctions from President Trump since returning to the White House,” Weafer said. “And the fear now is that now that he’s broken, kind of like a seal, that if he’s dissatisfied with any progress that Russia makes going forward, he could come in with more and more damaging sanctions.”
The EU also imposed sanctions on Rosneft and sanctioned 117 more tankers it says are part of Russia’s shadow fleet used to avoid price caps imposed by Western countries on Russian oil, bringing the total number of tankers sanctioned to 557.
Oil sanctions don’t start for 30 days
The sanctions won’t take effect until Nov. 21, a grace period that gives traders a chance to stop trading with Rosneft and Lukoil — but also offers Russia a chance to make more money in the short term.
“You can be sure that every oil buyer in Asia today is trying to find something that will allow them to buy Russian oil before the sanctions go into effect,” Weafer said.
Weafer said the White House may also be hoping that Russia will engage in serious negotiations that could lead to sanctions being suspended.
Sanctions cost Russia more and damage its economy in the long run
Russia has suffered a loss of oil and gas revenues due to sanctions after the EU cut off most of its imports of seaborne oil and cut off most of Russia’s natural gas shipments.
Russia spent billions amassing a “shadow fleet” of old tankers to continue shipping oil to Asia to avoid a $60 price limit imposed by the Group of Seven democracies. The cap was an attempt to cut Russia’s oil income without driving Russian oil off the global market and increasing prices, which was implemented by preventing Western insurers and shippers from handling oil priced above the cap.
Perrotta Berlin said Russia has lost about $100 billion in oil and gas sales since the start of the war, and sanctions have raised the cost of imported goods and deprived Russian companies of so-called dual-use goods such as computer chips that can be used for both civilian and military production. Yet, according to the Kyiv School of Economics Institute, Russia’s oil exports alone were worth $189 billion in 2024 and $154 billion in 2025.
Putin shows no interest in bowing down
Russia’s economy has seen slow growth this year and government oil revenues have declined due to low global oil prices. But the unemployment rate is low because military spending on weapons and recruitment bonuses keeps factories running. Putin, who on Thursday called the sanctions an “unfriendly act,” currently has the money to continue the war and has shown no interest in accepting a ceasefire.
One reason: Putin took steps to shore up Russia’s economy and reduce reliance on imports after the first round of sanctions when Russia illegally annexed the Crimea peninsula from Ukraine in 2014. Russia also plowed pre-war oil and gas earnings into the national wealth fund and has used it to help keep the budget deficit under control.
Jeremy Paner, a former US Treasury sanctions investigator, said Washington’s next step would be to target Indian and Chinese buyers of Russian oil, or take action against middlemen and brokers of Russian energy.
“The goal of these sanctions is not to prevent war, but to obtain a serious commitment to engage in the peace process,” Paner said.
Western governments, fearful of increasing pump and home heating prices for their voters, were initially reluctant to cut Russian oil. It took almost a year for the EU to phase out most Russian seaborne oil shipments following a full-scale 2022 invasion, and the price cap was announced months before it took effect, giving Russia time to prepare to avoid it.
Perrotta Berlin said, “Many of these measures have been implemented very slowly and … a little at a time to give Russia time to adapt, prepare, prevent and react.”
“It could have been even higher, but it still has a significant impact,” he said. “It is very important and good to continue to get behind fossil fuels.”
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Fatima Hussain in Washington and Harriet Morris in Tallin, Estonia contributed.