Washington follows UK in sanctioning Russia’s top oil producers

A week after UK’s action, the US has now introduced sanctions against Russia’s biggest oil companies, Lukoil and Rosneft.

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The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has targeted Rosneft and Lukoil, including a total of 34 subsidiaries belonging to both companies.

The sanctions were implemented “as a result of Russia’s lack of serious commitment to a peace process to end the war in Ukraine,” OFAC said in a statement.

The move comes one week after UK targeted the same companies, as well as 44 shadow fleet vessels and Indo-Russian oil refiner Nayara Energy, which allegedly imported 100 million bbls of Russian crude worth over $5 billion in 2024 alone.

The news has provided upward thrust to Brent crude’s price today after heightening supply concerns in the market, according to analysts.

Rosneft and Lukoil produce more than 5 million b/d of oil, ING Bank’s head of commodities strategy Warrant Patterson said. “Sanctions on companies producing more than 5m b/d [5 million b/d] of oil are significant,” he added.

Meanwhile, the UK government announced that it will ban imports of oil products refined in third countries from Russian-origin crude oil. 

“A tougher stance on Russia by the US administration… increases the risk of further sanctions against Russia (and potentially buyers of Russian oil) if there’s little progress on a Russia-Ukraine peace deal,” Patterson said.

By Aparupa Mazumder

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