(Bloomberg) — Oil surged after the US announced sanctions on Russia\u2019s biggest producers, as President Donald Trump ramps up pressure on his counterpart Vladimir Putin to negotiate an end to the war in Ukraine.<\/p>\n
Brent advanced as much as 3% to trade above $64 a barrel and West Texas Intermediate rallied to near $60 after the US blacklisted state-run giant Rosneft PJSC and Lukoil PJSC, citing Moscow\u2019s lack of commitment to peace in Ukraine. Russian crude flows to major Indian processors are expected to fall near zero following the penalties, according to senior refinery executives.<\/p>\n
Most Read from Bloomberg<\/p>\n
The sanctions mark a U-turn for Trump, who had announced last week he would meet Putin in the coming weeks and said repeatedly he believed Russia wanted to end the war. But on Tuesday, he said he didn\u2019t want a wasted meeting.<\/p>\n
President Donald Trump says the US is sanctioning Russia\u2019s biggest oil producers because of the country\u2019s lack of a serious commitment to end the war in Ukraine.Source: Bloomberg <\/p>\n
The penalties \u201cmark a shift in President Trump\u2019s approach to Russia and open the door for tougher sanctions down the road, which could ultimately impact Russian oil flows,\u201d said Warren Patterson, the head of commodities strategy for ING Groep NV in Singapore. \u201cThe uncertainty is how effective these sanctions will be and what impact they actually have\u201d on exports, he added.<\/p>\n
Following the measures, Trump said he planned to speak to Chinese President Xi Jinping about the nation\u2019s buying of Russian oil at a planned meeting next week in South Korea. On Tuesday, the US leader said India\u2019s Prime Minister Narendra Modi assured him that the country would wind down its purchases.<\/p>\n
The two nations became the biggest buyers of Russian oil following the war in Ukraine as other countries shunned Moscow for its invasion. Trump hit India with crushing tariffs for the trade, but has spared China from any action. Last week, the UK slapped sanctions on two Chinese energy firms that handle Russian energy, along with penalties on Rosneft and Lukoil.<\/p>\n
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\u201cThis is definitely one of the more meaningful measures the US has taken, but I think it will be blunted by the widespread use of illicit financial networks,\u201d said Rachel Ziemba, an analyst at the Center for a New American Security in Washington. China and India will likely buy a bit less, but there\u2019s not going to be sudden stop of Russian oil, she added.<\/p>\n
Rosneft, headed by Putin\u2019s close ally Igor Sechin, and privately held Lukoil are the two largest Russian oil producers, jointly accounting for nearly a half of the nation\u2019s total exports, according to Bloomberg estimates. Taxes from the oil and gas industries account for about a quarter of the federal budget.<\/p>\n
The US measures are a radical change of policy, where previous efforts included a Group-of-Seven price cap on Russian oil that sought to limit revenue for the Kremlin without disrupting supply and causing a spike in global prices.<\/p>\n
\u201cThe market will take time to digest exactly what this means,\u201d said Vandana Hari, the founder of market analysis firm Vanda Insights, adding that it\u2019s likely to be \u201ca major cause of concern for the refiners in India and China.\u201d<\/p>\n
Separately, European Union countries have reached an agreement on a new package of Russian sanctions that are expected to be adopted on Thursday. The measures will target 45 entities that have helped the OPEC+ producer evade penalties, including 12 companies in China and Hong Kong, according to a statement from Denmark, which holds the EU\u2019s rotating presidency.<\/p>\n
Brent has bounced back from a five-month low reached on Monday, but remains on track for a third monthly loss due to indications an expected global surplus is starting to emerge. Futures rebounded on Wednesday on signs the latest selloff was overdone and as US inventories shrunk.<\/p>\n
–With assistance from Weilun Soon.<\/p>\n
Most Read from Bloomberg Businessweek<\/p>\n
\u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — Oil surged after the US announced sanctions on Russia\u2019s biggest producers, as President Donald Trump ramps…\n","protected":false},"author":2,"featured_media":521231,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7655],"tags":[3662,169457,6202,332,5422,333,335],"class_list":{"0":"post-521230","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-russia","8":"tag-bloomberg","9":"tag-oil-producers","10":"tag-president-donald-trump","11":"tag-russia","12":"tag-russian-oil","13":"tag-vladimir-putin","14":"tag-war-in-ukraine"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115421451666117133","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/521230","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=521230"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/521230\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/521231"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=521230"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=521230"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=521230"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}