Trump’s sanctions on Russian oil companies disrupt Putin’s plans to prolong Ukraine war

He still has room to maneuver, but that space is getting smaller and smaller. The latest, and somewhat surprising, round of U.S. sanctions were levied against Rosneft and Lukoil, two giants of Russia’s still-powerful fossil fuel industry, narrowing possibilities for a Vladimir Putin still convinced he can keep his war in Ukraine going. On Thursday, the Russian president warned Donald Trump that the move would cost the United States dearly. The Kremlin is making no secret of its irritation, after having hoped to distance the current U.S. administration from the Ukrainian cause. This most recent step sent the country in exactly the opposite direction. Putin remained firm, however, commenting that, “no self-respecting country and self-respecting people make any decisions under pressure.”

Although Rosneft and Lukoil had been under Western sanctions for years, those had been partial. With the new measures, and with a cap on the sales price of Russian oil that has had less effect than initially estimated, the West is attempting to square the circle by keeping that crude oil on the market to prevent a sharp rise in prices, while at the same time reducing the Kremlin’s revenues. Now, Washington is going one step further by including both companies on the U.S. Treasury’s blacklist, with much tougher and more restrictive restrictions. Similar sanctions were levied by the United Kingdom last week, and China will also stop buying Russian oil, according to Reuters.

“These are very significant sanctions, and represent a very significant escalation in pressure on Russia,” says Jorge León, vice president and head of oil analysis at Norwegian consulting firm Rystad Energy. “But the key is what Turkey and, above all, India will do now. Preliminary indications suggest that they will stop buying Russian crude oil. If that happens, the risk for Moscow is significant,” he said by telephone. León added that around one million barrels per day would be at stake. This is an option that the market has already begun to price in, with a sharp rise since the new sanctions were announced.

If Russian crude oil has been unpopular since the start of the war in 2022, from now on, so too will that of the Kremlin’s two corporate industry figureheads. “Neither Rosneft nor Lukoil will be able to access the international financial system, they will not be able to collect in dollars, and insurance and transport companies will not be able to work with them either,” says León, who has had a long career as an oil analyst.

Now, the ball is in the court of others who buy huge shipments of crude oil, particularly India, which is forever straddling the West and the new order that Beijing is attempting to lead. The big question is whether Indian importers will reach agreements with both sides to pay in local currency (rupees or rubles), risking significant reputational damage with a White House that no longer views them favorably, or whether these corporate sanctions will achieve what the secondary tariffs with which the United States already punishes the world’s most populous country have failed to do.

India, along with China, is the country that has benefited most from the purchases of Russian crude oil at rock-bottom prices since the start of the war. In the last three years, New Delhi has gone from being just another customer to becoming the second-largest buyer of Urals oil (the name given to the main blend that Moscow sells) and the primary destination of the Kremlin’s shadow fleet, a decoy that Putin has used with some success to circumvent Western sanctions.

Shock in Moscow

In any case, this latest twist has a direct impact on the Kremlin’s strategy, which has been focused on appeasing Trump in order to distance him from Ukraine and the EU. Until now, instructions handed to Russian propaganda channels called for mentioning the “efforts” of the new U.S. administration to achieve peace, contrasting them with a supposedly terrifying Joe Biden.

With the election of Trump, the United States no longer seemed to be Russia’s great enemy, as it had always been portrayed by Putin. The symbolic gestures were clear, from prisoner exchanges to meetings between the head of Russian diplomacy, Sergey Lavrov, and his U.S. counterpart, Marco Rubio. There was the very striking summit in Alaska, which threatened to bring Putin out of diplomatic ostracism. And the preparations, postponed at the last minute, for a new meeting with Trump, this time in Hungary.

Now, the White House’s shift is causing much concern in Moscow. “The United States is our enemy, and their loquacious ‘peacemaker’ has now fully taken up the path of war with Russia,” said vice-chairman of the Russian Security Council, Dmitry Medvedev. “The decisions [sanctions] taken are an act of war against Russia. Trump has fully aligned himself with insane Europe. But this latest swing of Trump’s pendulum has a clear advantage [for Russia]: it allows us to attack with various weapons without worrying about unnecessary negotiations.” His is not a minor voice: in addition to being a former president and prime minister, Medvedev is in Putin’s inner circle, a longtime lieutenant to the leader.

However, there have been no real concessions: the Kremlin has remained firm in its rejection of an unconditional truce and, of course, of true peace. Territorial conquests aside, its ultimate goals are to install a puppet government in Kyiv that will bring Ukraine back into its orbit, and to disarm the country so that it is at its mercy.

While the world waits to find out the real damage caused by the new restrictions on the two oil companies — the two largest in the Eurasian country, accounting for half of Russia’s crude oil exports — two reactions suggest that the damage will be much more profound than on previous occasions. On the European side, Lithuania, one of Kyiv’s most vocal supporters in the EU, speaks of a “radical change” that “will directly affect the sector that is generating the revenue needed to maintain the Russian war machine.” Shortly afterwards, China — the largest customer for Russian gas and oil, even ahead of India — strongly criticized a measure that, it says, “has no basis in international law.”

Key to the economy

Moscow is considering its next steps. Presidential spokesperson Dmitry Peskov skipped Thursday’s daily press conference without giving any explanation for his absence, and Putin appeared hours later, clinging to the fact that the United States has elections in 2026 and Russian crude oil is difficult to replace. “This will cause a sharp increase in the price of oil and its derivatives, even at gas stations. The United States will be no exception,” said the Kremlin chief.

The export of fossil fuels is a fundamental pillar of the Russian economy. Despite its days being numbered — whether the Kremlin admits it or not, energy transition is an unstoppable force, with enormous geopolitical consequences — it continues to be, by a considerable margin, the country’s largest sector. One of every four rubles that enters the Russian treasury comes from fossil fuels. Without them, the invasion of Ukraine would be little more than a pipe dream.

The military campaign takes up around 40% of the Russian budget. With reserves depleted, Moscow has been forced to implement a significant tax increase in 2026 to support the expenditure. Although the Kremlin, according to several Russian analysts who spoke to EL PAÍS, has room to prolong the war next year without major changes, Trump’s shift opens the door to its worst-case scenarios: greater fiscal adjustment and more sacrifices for its citizens, just as it tries to adjust an economy disfigured by military spending that has been teetering on the brink for months.

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