U.S. Imposes New Sanctions on Russia's Largest Oil Companies Amid Ukraine Conflict

On October 22, 2025, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) imposed sanctions on Russia's two largest oil companies, Rosneft and Lukoil, citing Russia's continued military actions in Ukraine and lack of commitment to a peace process. These sanctions freeze all U.S.-held assets of the companies and prohibit U.S. persons from engaging in transactions with them or their subsidiaries. The measures aim to degrade the Kremlin's ability to fund its military operations by targeting its primary revenue source.

In response to the sanctions, global oil prices surged by approximately 5%, with Brent crude reaching $65.99 per barrel and West Texas Intermediate (WTI) crude rising to $61.79 per barrel. The sanctions also prompted energy firms in China and India to reconsider their imports of Russian oil. Chinese state-owned oil companies, including PetroChina, Sinopec, CNOOC, and Zhenhua Oil, have halted purchases of seaborne Russian oil due to concerns over compliance with international sanctions.

The European Union (EU) has also taken measures against Russia's energy sector. On October 22, 2025, the EU approved its 19th sanctions package, which includes a phased ban on Russian liquefied natural gas (LNG) and sanctions on Russia's "shadow fleet"—vessels used to circumvent existing energy restrictions.

U.S. Treasury Secretary Scott Bessent emphasized the urgency of the situation, stating, "Now is the time to stop the killing and for an immediate ceasefire." He further noted that the sanctions aim to pressure Russia into negotiating a peaceful resolution to the conflict in Ukraine.

Ukrainian President Volodymyr Zelensky welcomed the sanctions, calling them a "very important" step toward securing peace. He also urged for continued pressure on Moscow to achieve a ceasefire.

This is not the first time the U.S. has imposed sanctions on Russian energy companies. In January 2025, the U.S. announced extensive sanctions against the Russian energy sector, including major companies like Gazprom Neft and Surgutneftegaz, aiming to hinder Moscow's ability to fund its military operations in Ukraine. However, the recent sanctions mark a significant policy shift for President Donald Trump, who had previously avoided sanctioning Russia over the war and instead used trade tariffs.

The sanctions are expected to have significant implications for global energy markets and geopolitical dynamics. Analysts predict that the measures could lead to further increases in oil prices and prompt countries to seek alternative energy sources. The situation remains fluid, and the international community continues to monitor developments closely.