U.S. Treasury Sanctions Russia’s Largest Oil Companies Over Ukraine

The U.S. Department of the Treasury imposed sanctions on Russia’s two largest oil companies on October 22, targeting Rosneft and Lukoil in response to Moscow’s continued refusal to pursue peace in Ukraine. The action mark the first major sanctions imposed by the U.S. against Russia under the current Trump Administration.

Secretary of the Treasury Scott Bessent said the action was necessary given President Putin’s unwillingness to negotiate. “Now is the time to stop the killing and for an immediate ceasefire,” Bessent stated. “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.”

The sanctions come a day after a planned meeting between Presidents Trump and President Putin about the war in Ukraine was cancelled.

The Treasury’s Office of Foreign Assets Control designated Rosneft and Lukoil under Executive Order 14024 for operating in the energy sector of the Russian Federation economy. Rosneft is a vertically integrated energy company handling exploration, extraction, production, refining, transport, and sale of petroleum and natural gas. Lukoil operates in oil and gas exploration, production, refining, marketing, and distribution both domestically and internationally.

The sanctions extend to numerous Russia-based subsidiaries of both companies, with OFAC designating entities involved in everything from oil refineries to gas field development. All entities owned 50 percent or more by Rosneft and Lukoil are automatically blocked under the executive order.

Bessent emphasized the administration’s readiness to escalate pressure if necessary. “Treasury is prepared to take further action if necessary to support President Trump’s effort to end yet another war. We encourage our allies to join us in and adhere to these sanctions,” he said.

The U.S. action follows similar measures by the United Kingdom, which announced 90 new sanctions targeting Russia’s energy sector on October 15, directly hitting Rosneft and Lukoil. The coordinated Western actions aim to further drain Russia’s vital oil and gas revenues, with the two Russian oil giants together exporting 3.1 million barrels of oil per day, and Rosneft alone responsible for 6% of global oil production and nearly half of all Russian oil production.

It also comes as the European Union is poised to adopt its 19th sanctions package against Russia later this week, with the measures targeting China’s role in helping Moscow circumvent Western restrictions. The package is expected to list four Chinese entities involved in the oil industry, including two independent refineries and a trading firm, as well ban liquefied natural gas imports from Russia starting in 2027, marking the most economically significant Chinese listings to date.

Under the sanctions, all property and interests in property of designated persons in the United States or under control of U.S. persons are blocked. Foreign financial institutions conducting or facilitating significant transactions with designated persons risk secondary sanctions, including potential restrictions on maintaining correspondent or payable-through accounts in the United States.

Violations of the sanctions can result in civil or criminal penalties, with OFAC authorized to impose civil penalties on a strict liability basis.

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