Oil Jumps More Than 5% After New U.S. Sanctions on Russian Firms
Trump said: “I just felt it was the right moment. Every time I talk to Vladimir we have good conversations, but nothing happens.”
Quick overview
- The U.S. imposed sanctions on Russia's two largest oil companies to pressure the Kremlin for a ceasefire in Ukraine.
- Brent crude prices surged by up to 6% following the announcement, settling at $65.64 per barrel.
- Treasury Secretary Scott Bessent emphasized the need for an immediate ceasefire and indicated readiness for further actions if necessary.
- This decision marks a significant shift in President Trump's foreign policy, moving away from attempts to improve relations with Russia.
The United States sanctioned Russia’s two largest oil companies in an effort to force a ceasefire in Ukraine, marking a sharp shift in President Donald Trump’s strategy and triggering a strong rally in crude prices on Thursday.
Brent crude jumped as much as 6% following the announcement before paring gains to settle at $65.64 per barrel on international markets.
Sanctions Meant to Pressure the Kremlin
In an official statement, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) said the measures respond to Russia’s “lack of serious commitment to a peace process.” The objective, it added, is to increase pressure on Russia’s energy sector and restrict the Kremlin’s ability to finance its war machine.
“This is the time to stop the killing and achieve an immediate ceasefire,” said Treasury Secretary Scott Bessent. He added:
“Given President Putin’s refusal to end this senseless war, we are sanctioning Russia’s two largest oil companies that financially support the Kremlin. The Treasury stands ready to take further action if necessary to support President Trump’s efforts to end yet another war. We encourage our allies to join and comply with these sanctions.”
The sanctions target Rosneft, a vertically integrated producer involved in exploration, extraction, refining, and marketing of crude and natural gas, and Lukoil, which operates both domestically and abroad.
A Shift in Trump’s Strategy
The move represents a notable reversal in President Trump’s foreign policy, coming just weeks after he sought to improve relations with Moscow. According to officials, the decision followed Trump’s abrupt cancellation of a planned meeting with Russian President Vladimir Putin in Budapest, after Putin refused to declare a ceasefire.
Together, Rosneft and Lukoil account for nearly half of Russia’s crude exports, making the sanctions a direct blow to the country’s energy revenues.
Asked about the decision, Trump said: “I just felt it was the right moment. Every time I talk to Vladimir we have good conversations, but nothing happens.”
He also rejected the idea of propping up oil prices: “I prefer cheap oil. I hope these sanctions are short-lived and that Putin agrees to a ceasefire so we can lift them soon.”
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