FRANKFURT, Germany (AP) — The United States and the European Union are hitting Russia with another round of sanctions, aimed at reducing oil and gas export revenues that finance Moscow’s war against Ukraine.
More than three and a half years after the war, the effort remains a game of cat and mouse, with Russia finding new ways to circumvent sanctions, and Washington and Brussels adding new ones and looking for ways to close gaps in sanctions enforcement.
The main target of the latest round: Russia’s largest oil companies, Rosneft and Lukoil. New sanctions from the US Treasury threaten its clients in India and China with retaliation that could include being sanctioned themselves.
Meanwhile, the EU is phasing out shipments of Russian liquefied natural gas arriving by ship by the end of next year, and is going after cryptocurrency issuers, platforms and exchanges that Russia has used to circumvent restrictions on its financial transactions with the outside world.
US Treasury Secretary Scott Bessent said the move was aimed at pressuring Russian President Vladimir Putin to accept President Donald Trump’s proposals for an “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 that “Treasury is prepared to take additional action if necessary.”
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Targeting oil, the pillar of Russia’s state finances
Rosneft and Lukoil account for about half of Russia’s oil exports, which together with natural gas and petroleum products have provided between 30% and 50% of state revenue over the past decade. The largest customers of Russian oil are China, with around 2.1 million barrels per day, and India, with 1.5 million.
Refineries in India and China that buy Russian oil to turn into gasoline and diesel could face U.S. sanctions if they deal with those companies, as could their banks.
“Being hit by US sanctions, even secondary, is like the death penalty for the private sector,” said sanctions expert Maria Perrotta Berlin of the Stockholm Institute for Transitional Economics.
As a result, India’s main refiner, Reliance Industries’ Jamnagar facility, could reconsider its 600,000 barrels per day Russian crude imports and will “probably stop or pause” shipments, said Johannes Rauball, senior crude oil analyst at data analytics firm Kpler. Unpurchased Russian barrels could end up in storage or seeking another customer at a discounted price, he said. “This puts Russia in a difficult situation.”
US oil prices rose 5% to $61.44 a barrel on Thursday and the international benchmark Brent rose 4.7% to $65.52. A Treasury spokesman, who spoke on condition of anonymity to discuss the sanctions, said the latest action is not expected to significantly affect energy costs for American consumers, and the Treasury expects prices to remain stable.
Chris Weafer, chief executive of consulting firm Macro-Advisory Ltd., said the biggest takeaway was Trump’s willingness to add sanctions to those imposed under the Biden administration.
“This is President Trump’s first set of sanctions after his return to the White House,” Weafer said. “And the fear now is that now that it’s broken, sort of like the seal, so to speak, if you’re not happy with any progress with Russia in the future, then you can impose increasingly damaging sanctions.”
The EU also added sanctions on Rosneft and sanctioned 117 more tankers it says are part of Russia’s shadow fleet used to evade a Western-imposed price cap on Russian oil, bringing the total to 557.
Oil sanctions do not begin for 30 days
The sanctions will not take effect until November 21, a grace period that gives traders a chance to do business with Rosneft and Lukoil, but also gives Russia a chance to make more money in the short term.
“You can be sure that all the oil buyers in Asia today are trying to find something that floats so they can buy Russian oil before the sanctions go into effect,” Weafer said.
The White House can also hope that Russia will engage in serious talks that will allow sanctions to be lifted, Weafer said.
Sanctions add costs to Russia and degrade its economy in the long term
The sanctions have cost Russia lost oil and gas revenues after the EU cut off most seaborne oil imports and Russia cut off most natural gas shipments.
Russia spent billions building a “shadow fleet” of aging tankers to continue shipping oil to Asia to evade a $60 price cap imposed by the Group of Seven democracies. The cap was an attempt to cut Russia’s oil profits without removing Russian oil from the global market and causing a price increase, imposed 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 costs 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 productions. Still, Russia exported $189 billion in oil alone in 2024 and $154 billion in 2025, according to the kyiv Institute of Economics.
Putin shows no inclination to give in
The Russian economy has seen slowing growth this year and the government’s oil revenues have fallen due to lower global oil prices. But the unemployment rate is low, as military spending on weapons and recruiting bonuses keeps factories running. Putin, who on Thursday called the sanctions a “hostile act,” has the money for now to continue the war and has shown no inclination to accept a ceasefire.
One reason: Putin took steps to shield the Russian economy from sanctions and reduce dependence on imports after a first round of sanctions when Russia illegally annexed Ukraine’s Crimean Peninsula in 2014. Russia also kept prewar oil and gas profits in a national wealth fund and has drawn on that to help keep budget deficits 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 go after Russian energy brokers and brokers.
“The goal of these sanctions is not to stop the war, but to achieve a serious commitment to participate in the peace process,” Paner said.
Western governments, fearful of rising pump and home heating prices for their voters, were initially reluctant to cut off Russian oil supplies. It took almost a year after the full-scale invasion of 2022 for the EU to end most seaborne shipments of Russian oil, and the price cap was announced months before it took effect, giving Russia time to prepare to evade it.
“Many of these measures have been implemented too slowly and … piecemeal, so that Russia has had time to adapt, prepare, prevent and react,” Perrotta Berlin said.
“It could have been more, but it is still a substantial impact,” he added. “Continuing to pursue fossil fuels is very important and good.”
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Fatima Hussein in Washington and Harriet Morris in Tallinn, Estonia, contributed.
