The US Department of the Treasury imposed sanctions on Russia's two largest oil companies, Rosneft and Lukoil, on October 22, 2025, aiming to degrade Moscow's ability to finance its war in Ukraine and support its strained economy.

These measures seek to pressure Russia into negotiating a peaceful resolution and an immediate ceasefire in the conflict with Ukraine. Secretary of the Treasury Scott Bessent emphasised that these sanctions increase pressure on Russia's energy sector and undermine the Kremlin’s war machine funding.

The US is ready to take further action as necessary to support President Trump's efforts to end the war, calling on allies to adhere to the sanctions as well.

Rosneft is a vertically integrated energy firm specialising in exploration, extraction, production, refining, transport, and sale of petroleum, natural gas, and related products. Lukoil is engaged in exploration, production, refining, marketing, and distribution of oil and gas domestically and internationally.

Both companies are now designated entities under Executive Order 14024, resulting in the freezing of their assets within the United States and prohibiting US persons from conducting financial transactions with them. Additionally, all entities owned 50% or more by Rosneft and Lukoil, directly or indirectly, are blocked, irrespective of individual designation status. This action includes multiple Russia-based subsidiaries of the two firms.

The sanctions mandate that any property or interests of the designated entities within US jurisdiction or controlled by US persons be blocked and reported to the Office of Foreign Assets Control (OFAC).

Foreign financial institutions engaging in significant transactions involving Russia’s military-industrial base or the blocked entities risk secondary sanctions and potential restrictions on correspondent banking services in the US. Violations of these sanctions expose parties to civil or criminal penalties under strict liability standards.

Illustrating their global impact, Rosneft and Lukoil are central to Russia’s crude oil exports, together responsible for around half of the country's output, approximately 3.1 million barrels daily. These sanctions follow similar measures recently imposed by the UK and come amid stalled diplomatic efforts, with President Trump highlighting Moscow's unwillingness to cease what he described as a "senseless war."

The US Treasury's sustained sanction efforts underscore that a lasting peace depends wholly on Russia's willingness to negotiate in good faith.

In the broader geopolitical context, these sanctions risk disrupting the energy connection between Russia and major Asian consumers such as China and India, who have been significant importers of Russian oil. However, a transition period until November 21, 2025, allows companies to adjust agreements to mitigate immediate market disruptions.

Ultimately, the US Treasury stated that the goal of these sanctions is not punitive but targeted to bring about a positive change in Russian behaviour, pressing for an end to the conflict in Ukraine through financial and diplomatic means. Additional export restrictions administered by the US Commerce Department may also apply to sanctioned entities on the Specially Designated Nationals (SDN) List.

This strategic escalation demonstrates the US commitment to using economic pressure on critical sectors of the Russian economy to compel a ceasefire and support a diplomatic peace process in Ukraine.​

Based On ANI Report