U.S. President Donald Trump appears to have come to the view long-held by others who know how his Russian counterpart Vladimir Putin operates that the war in Ukraine must finally cause him hard-hitting consequences before it can come to an end. After all, the Little Emperor’s geopolitical game plan has always been to keep pushing until he runs into a force greater than his own, whether that is in Ukraine or further westwards in Europe. Indeed, the only reason that Putin did not use tactical nuclear weapons in Ukraine after it was apparent his forces would not secure the seven-day victory he had anticipated was that it was made clear to him that if he did so then Washington and its allies would destroy Russia’s troops and equipment in Ukraine, as well as sink its Black Sea fleet, according to former CIA director and retired four-star army general David Petraeus. As it now stands, NATO Secretary General Mark Rutte aptly said last week: “The truth is that Putin is running out of money, troops, and ideas. President Trump said it very well: ‘They should stop where they are now’. And now it’s high time to increase pressure on Russia, so we can finally get a fair and just peace for Ukraine.” One step away from direct military engagement of the Russian military on Ukrainian soil by NATO forces is the full use of Tomahawk cruise missiles that could strike deep into Russia, including Moscow, and one step before that is choking off the financing for the war. As most of this comes from Russia’s continued oil and gas exports, this is what the U.S. and European Union (E.U.) of 27 countries focused on last week.

Related: China Leads World’s Underground Gas Storage Buildup

The latest sanctions the U.S. introduced on 22 October are aimed at Russian oil giants Rosneft and Lukoil. The former is the country’s largest oil company, accounting for around 40% of its oil production and about 30% of its oil refining market, while Lukoil is Russia’s second-largest oil producer. Between them, the two companies export approximately 3.1 million barrels of oil per day, according to the latest industry data. The measures are part of comprehensive blocking sanctions overseen by the U.S. Treasury’s Office of Foreign Assets Control, and include the two firms – together with their multiple subsidiaries – being added to the Specially Designated Nationals and Blocked Persons List. From the U.S. side, all the firms’ interests in the country are now blocked, and all the U.S. companies and citizens are barred from any dealings with either. The targeting of Russia’s two top oil firms builds on the previous sets of sanctions that encompassed firms such as Gazpromneft and Surgutneftegas, which were in turn part of Washington’s gradual ‘tightening of the screws’ on Putin, as analysed by OilPrice.com. Again, as with these earlier sanctions, the E.U. increased complementary sanctions on Russia introduced around the same time in its 19th sanctions package. These include boosting measures targeting Russia’s shadow fleet of vessels that it uses to evade current restrictions. Specifically, the Union added 117 shadow fleet vessels to its sanctions list, giving a total of 558 tankers now. And for the first time, the E.U. also targeted Russia’s crucial liquefied natural gas (LNG) sector, having earlier agreed to halt all Russian gas imports by 1 January 2027 – one year earlier than previously agreed. This was part of a broader 16 October vote to accelerate the union’s phaseout of Russian oil, gas, and LNG, which also saw the proposal to implement a full ban on Russian oil imports into the region from 1 January 2026. Non-LNG gas imports from Russia are also facing a ban one year earlier than previously proposed – from 1 January 2028 to 1 January 2027.

Perhaps even more importantly, similar prohibitions on Rosneft and Lukoil are to be applied by the U.S. to any other countries’ companies and financial institutions that engage in “significant transactions” involving the two firms or their subsidiaries – including the two big global buyers of Russian oil and gas, China and India. In 2024, China bought a record of more than 100 million tonnes of Russian crude oil, which accounted for almost 20% of its total energy imports. Meanwhile, India’s imports of oil from Russia has grown to around US$140 billion-worth since 2022, given the big discounts Moscow has been offering it. The figures highlight the fact that Russia, like Iran before it, has developed its expertise and methods of working around sanctions, as analysed in full in my latest book on the new global oil market order. These involve a shadow fleet of vessels, as Iran also operates, plus misleading documentation, and ship-to-transfers, among other mechanisms. Consequently, the U.S. has notably switched its focus very recently to targeting those who buy it, with the goal of ensuring minimal demand for Russia oil and gas. For example, Trump called out India on his Truth Social network for: “Not only buying massive amounts of Russian Oil, [but also] they are then, for much of the Oil purchased, selling it on the Open Market for big profits.” He added: “They don’t care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA.” Following this, the U.S. doubled its tariffs on India to 50%. At the same time, New Delhi faces pressure from E.U. prohibitions shortly to come into effect on refined oil products coming into the continent that are made using Russian oil.

The U.S. also recently warned China that ongoing imports of Russian oil could lead to huge tariffs being imposed on the country, a senior source who works in the E.U.’s energy security complex exclusively told OilPrice.com. “During the talks [end-July U.S.-China trade talks in Stockholm], [U.S. Treasury Secretary Scott] Bessent told his opposite number [Vice Premier He Lifeng] that legislation [‘Sanctioning Russia Act of 2025’] is being drawn up in Congress authorising the imposition of up to 500% tariffs on countries that buy sanctioned Russian oil.” In reality, the Act goes wider to encompass any country that “knowingly sells, supplies, transfers, or purchases oil, uranium, petroleum products, or petrochemical products that originated in the Russian Federation”. It currently has 84 listed co-sponsors in the U.S. Senate alone, according to the U.S. Congress website, and the Speaker of the House has also indicated his chamber’s support to pass the bill. The U.S. has also suggested to China that it may treat Beijing’s assistance to Russia in much the same manner as it has started to treat the same for Iran. This was seen in the very recent U.S. State Department announcement on Iran-related sanctions that it would impose sanctions on 20 entities it believes are engaged in trading Iranian oil and petrochemical products, including China’s Zhoushan Jinrun Petroleum Transfer Co., an oil terminal in the greater Zhoushan port area. Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson said of these China sanctions that: “The Iranian regime continues to fuel conflict in the Middle East to fund its destabilizing activities, [and] Today, the United States is taking action to stem the flow of revenue that the regime uses to support terrorism abroad, as well as to oppress its own people.” Zhoushan Jinrun was highlighted by the State Department for: “…knowingly engaging in a significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran”. The port is the fourth of China’s to be sanctioned by Washington in recent weeks, following similar actions against Huaying Huizhou Daya Bay Petrochemical Terminal Storage in March, Guangsha Zhoushan in April, and Dongying Port in May.

Trump has also made it clear that it wants Europe to follow suit in sanctioning China for its continued imports of Russia oil and gas, as analysed recently by OilPrice.com. This was fully acknowledged at the time by European Commission President Ursula von der Leyen and E.U. foreign policy head Kaja Kallas, and last week the Union sanctioned its first Chinese buyer — Liaoyang Petrochemical, a trading subsidiary and a refinery of energy giant, the China National Petroleum Corporation – for importing Russian crude oil through the Eastern Siberia–Pacific Ocean oil pipeline. “This can be taken as a clear warning that the E.U. and U.S. can and will do more against China, if it does not voluntarily agree to reduce its Russian energy supplies,” concluded the E.U. source.

By Simon Watkins for Oilprice.com

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