Global traders, banks, and refineries are on notice after the Trump administration sanctioned Russia’s two largest oil companies, Rosneft and Lukoil. The move raises immediate questions about the risk of secondary sanctions.
The measures, announced by Treasury Secretary Scott Bessent, are aimed at cutting off funding for Russia’s “war machine.” Bessent called for an “immediate ceasefire” and blamed Putin’s “refusal” to end the war.
Former sanctions official Edward Fishman noted that the key question now is “whether the US would threaten foreign traders, banks and refineries that continue to facilitate the sale of Russian oil.” Fishman expects “at the very least, some pullback from dealings with Russian oil in the short term.”
The sanctions on Rosneft, the state-owned giant, were seen as overdue by experts. The inclusion of privately-owned Lukoil is a step the EU has not taken, due to exemptions for Hungary and Slovakia.
The economic strike was paired with a diplomatic one, as President Trump cancelled a planned summit with Vladimir Putin. Trump said the meeting “didn’t feel right” as negotiations were not progressing, marking a new low in relations.