After Trump took office, the U.S. sanctioned two major Russian oil companies for the first time, and oil prices surged 4% in response.

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After diplomatic efforts with Russia reached an impasse, the Trump administration took its toughest economic pressure measures so far, imposing sanctions for the first time on Russia’s two largest oil companies—Rosneft and Lukoil.

According to Global Times, the planned meeting between the leaders of the US and Russia in Budapest has been postponed. Trump stated that he did not want to hold a “meaningless meeting”. US media analysis believes the core reason for the delay was “fundamental differences” between the two sides on the issue of a ceasefire in Ukraine.

The change in plans for the US-Russia summit laid the groundwork for subsequent economic pressure. The sanctions announced by the US Treasury mark the first time the Trump administration has imposed direct economic costs on Russia over the Russia-Ukraine conflict. US Treasury Secretary Bassent said the US is ready to take further action.

Previously, the Biden administration sanctioned Gazprom Neft and Surgutneftegas in January, but due to concerns about pushing up global energy prices, did not take action against Rosneft and Lukoil.

The latest sanctions mean that all of Russia’s four major oil giants are now subject to US sanctions. Following the announcement, concerns about potential disruption of Russian crude supplies intensified in the market, driving international crude oil prices up by more than 4%.

Sanctions Aim to Cut Off Cash Flow, Could Impact Russia's Exports to Asia

The core target of these sanctions is to “weaken” Russia’s cash flow.

With Rosneft and Lukoil added to the list, the US has now sanctioned all four of Russia’s largest oil companies. Rosneft is the world’s second-largest oil producer after Saudi Aramco.

According to Amrita Sen, an analyst at energy consultancy Energy Aspects, this move will “further complicate the oil exports of Russian companies.” She believes the new sanctions may force Asian buyers to cut their purchases of Russian oil.

Analysis points out that while Russian oil giants redirected supplies from Europe to Asia in 2022, their situation has sharply deteriorated this year as global energy prices have fallen and the US has imposed secondary tariffs on Indian purchases of Russian oil.

Trump Losing Patience with Putin; EU Tightens Sanctions in Tandem

This round of sanctions marks a significant shift in the Trump administration's Russia policy.

Quoting CNN, Global Times said Trump's “disappointment” was the latest development in the past week—he initially appeared ready to deliver Tomahawk missiles to Ukraine, but changed his mind after speaking with Putin, and subsequently clashed with Ukrainian President Zelensky at the White House. Currently, the US has reverted to its previous position, demanding an immediate Russia-Ukraine ceasefire, using the current front line as the starting point for negotiations.

According to US media cited by Global Times, the postponement of the meeting was due to “fundamental differences” between the US and Russia on the Russia-Ukraine ceasefire. Trump previously advocated for dividing the Donbas region according to current front lines, a ceasefire and troop withdrawal on both sides, but on the 21st, Lavrov said the call for an “immediate ceasefire” amounted to ignoring the root causes of the conflict, and contradicted the consensus previously reached by the US and Russian presidents.

At the same time, the EU is also tightening its sanctions against Russia in tandem.

According to media reports, after Slovakia dropped its opposition, the EU is expected to announce its new round of sanctions on Thursday, echoing US action. Danish officials said the package will include a ban on imports of Russian liquefied natural gas effective January 1, 2027.

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