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The US is imposing sanctions on Russia’s two biggest oil companies, Rosneft and Lukoil, aiming to “degrade” Vladimir Putin’s war chest and support Donald Trump’s effort to end the war in Ukraine.
The move marks the first time the Trump administration has imposed direct costs on Russia over the war.
“Now is the time to stop the killing and for an immediate ceasefire,” said Treasury secretary Scott Bessent. “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 the US was prepared to take further action. “We encourage our allies to join us in and adhere to these sanctions,” he said.
A number of Russian-based subsidiaries majority-owned by Rosneft and Lukoil have also been sanctioned under the move, which could bar them from all transactions in US dollars.
Last week, the UK unveiled sanctions on the two oil majors, while the EU is set to announce its 19th package of penalties on Moscow, including a ban on imports of Russian liquefied natural gas.
Crude oil prices rose more than 4 per cent on expectations that the move would cut Russian supplies to the global market.
“This will further complicate oil exports by Russian companies, something we had already started to see after the UK sanctions,” said Amrita Sen at Energy Aspects.
Sen said the sanctions could push Chinese and Indian buyers to stop buying as much Russian oil — which Trump has demanded.
In January, the Biden administration imposed sanctions on Russian oil majors Gazprom Neft and Surgutneftegas but held off imposing penalties on Rosneft and Lukoil over concerns that it could drive up global energy prices.
Wednesday’s announcement by the Trump administration means that Russia’s four largest oil companies have now been hit with US sanctions.
Trump has grown increasingly frustrated with Putin over the continued war, now in its fourth year.
“Every time I speak with Vladimir, I have good conversations, and then they don’t go anywhere,” Trump said on Wednesday in the Oval Office.
Asked about the decision to impose sanctions on Moscow, Trump said: “I just felt it was time.”
“These are tremendous sanctions,” the president said. “We hope that they won’t be on for long. We hope that the war will be settled.”
Trump has urged allies in Europe and countries such as India and China to halt their purchases of Russian energy, a crucial source of revenue for the Kremlin.
In August, he announced an additional 25 per cent tariff on New Delhi, one of the world’s biggest importers of Russian crude. Earlier this month, the US declined to issue a waiver for Serbia’s only oil refinery, which is owned by Russia, allowing Biden-era sanctions to go into effect.
Trump and Putin spoke over the phone on Thursday last week, after which the US president announced plans to meet with the Russian leader in Budapest, Hungary in the coming weeks.
The planned summit was called off five days later, following a call between the US secretary of state Marco Rubio and Russian foreign minister Sergei Lavrov.
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