U.S. Sanctions Two Major Russian Oil Companies
Cutting Off Putin’s Funding Amid Stalemate in Ukraine War
Brent and WTI Surge Over 5%
The Donald Trump administration has imposed sanctions on two major Russian oil companies for their passive stance on ending the war in Ukraine, causing international oil prices to surge.
As of the morning of October 23 (local time), West Texas Intermediate (WTI) crude oil was trading at $61.64 per barrel, up $3.14 (5.37%) from the previous session, while Brent crude, the global oil price benchmark, was up $3.13 (5.0%) to $65.72 per barrel compared to the previous day.
The previous day, the U.S. Department of the Treasury placed Russia’s major oil companies, Rosneft and Lukoil, on its sanctions list. As a result, all subsidiaries and related entities in which these two companies hold more than a 50% stake will have their assets frozen, and U.S. companies and individuals are completely prohibited from conducting transactions with them. This sanction is intended to cut off Russia’s war funding. President Trump personally announced the sanctions, stating, “We will continue to use sanctions as a tool to support peace negotiations.”
Due to this measure, there is speculation that India, a major importer of Russian crude oil, may halt its purchases from Russia. According to Bloomberg News, India’s refining industry believes that importing Russian oil will become virtually impossible under the new sanctions. The market is watching whether China will fill the gap left by India, which is expected to be a key factor influencing future trends.
Additionally, the European Union agreed the previous day on its 19th sanctions package against Russia, aimed at cutting off Russia’s oil and gas revenues. The package includes a plan to ban imports of Russian liquefied natural gas (LNG) starting in January 2027, one year earlier than initially scheduled.
However, the current oil supply remains relatively abundant as OPEC Plus member and non-member countries have increased production. The growth in demand is also slowing.
Jorge Leon, Head of Geopolitical Analysis at Rystad Energy, said, “The U.S. sanctions against Russia’s largest oil producers mean Washington’s pressure on Moscow has reached unprecedented levels. Combined with a recent series of attacks on Russian oil infrastructure, these sanctions will cause significant disruptions to Russian oil production and exports, increasing the risk of forced production shutdowns.”
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