US Sanctions Russian Oil Firms, Calls For Ukraine-Russia Ceasefire

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced on Wednesday, sweeping sanctions targeting Russia’s two largest oil companies, Rosneft and Lukoil, as part of a broader effort to pressure Moscow into agreeing to an immediate ceasefire in Ukraine.

Rosneft and Lukoil account for nearly half of Russia’s total crude-oil exports, with combined daily exports of 3.1 million barrels, making them critical to Russia’s economy and war funding.

OFAC designated both companies for operating in the Russian energy sector, effectively prohibiting transactions involving them or any entity in which they hold a 50% or greater ownership stake.

The move, the first direct economic action against Russia’s energy sector under President Donald Trump’s second term, was justified by the Treasury as a response to Russia’s "lack of serious commitment to a peace process" and President Vladimir Putin’s "refusal to end this senseless war."

The sanctions, enacted under Executive Order 14024, block all property and interests in property of the designated companies and their subsidiaries within U.S. jurisdiction, aiming to degrade the Kremlin’s ability to fund its war machine and weaken its energy-dependent economy.

The sanctions were announced just hours after President Trump canceled a planned summit with Putin in Budapest, stating it "didn’t feel right" and that he felt it was "time" to act.

Treasury Secretary Scott Bessent emphasized that the targeted companies fund the Kremlin’s "war machine" and called for an immediate ceasefire, stating, "Now is the time to stop the killing." He said the sanction is a response to Putin’s "refusal to end this senseless war."

The move follows similar sanctions imposed by the UK a week prior and is part of a coordinated effort to isolate Russia economically, with the U.S. urging its allies to align with the new measures.

The European Union also approved its 19th sanctions package, including a ban on Russian liquefied natural gas (LNG), with short-term contracts phased out within six months and long-term deals ending by January 1, 2027.

Wednesday's announcement coincided with Russia’s large-scale nuclear training drills and a significant air attack on Ukraine, including Kyiv, further escalating tensions.

Ukrainian Ambassador to the U.S., Olga Stefanishyna, welcomed the sanctions, stating they align with Ukraine’s position that peace is possible only through strength and pressure on the aggressor.

The sanctions have already caused global oil prices to surge, with Brent crude rising 5% following the announcement

The U.S. is also pressuring major Russian energy buyers like China and India to halt purchases, warning of potential secondary sanctions if they continue.

Putin has delivered a defiant response to new U.S. sanctions calling the measures an "unfriendly act" with "certain consequences" but asserting they will not significantly affect Russia's economic well-being. He emphasized that no self-respecting country yields to pressure, declaring Moscow would never bow down to Washington or any other nation. He described the U.S. sanctions as a "hostile act" that damages Russian-American relations but insisted Russia's energy sector remains confident.

In reaction to reports that Ukraine might use long-range Tomahawk missiles acquired from the U.S., Putin stated this constitutes an "attempt at escalation." He explicitly threatened that if such weapons are used to attack Russian territory, the response would be "very serious, if not overwhelming," urging the West to "think about it."

While the sanctions are seen as a significant symbolic and economic move, analysts suggest their long-term effectiveness in forcing a diplomatic breakthrough remains uncertain, as Russia’s economy may adapt, and Putin’s position on Ukraine’s territory has not shifted.