Russian President Vladimir Putin projected defiance on Thursday after U.S. President Donald Trump imposed sweeping sanctions on Rosneft and Lukoil, Russia’s two largest oil producers, in a bid to compel Moscow to halt its war in Ukraine.
The announcement, made as oil prices jumped roughly five percent, immediately reverberated through energy markets: Chinese state oil companies paused near-term purchases of Russian crude, according to trading sources, and Indian refiners—now the biggest buyers of seaborne Russian oil—were reported by industry contacts to be preparing sharp reductions in imports. The move signaled a clear shift in Washington’s posture; only a week earlier Trump had suggested he would soon meet Putin in Budapest to pursue a negotiated end to the conflict.
Rosneft and Lukoil together account for more than five percent of global oil output, making the sanctions a direct strike at a key pillar of Russia’s economy. While the near-term fiscal impact may be contained—Russia’s budget relies more heavily on taxes on production than on export volumes—the measure is designed to constrict revenue over time, raise compliance risks across the trade network, and increase financing and logistics frictions associated with Russian barrels. Putin dismissed the measures as an unfriendly but manageable pressure tactic, insisting they would not materially weaken the Russian economy and arguing that any steep fall in Russian supply would elevate global prices in ways that could discomfort the United States and other large consumers. Trump, told of Putin’s downplaying of the effect, responded that he would reassess the outcome in six months.
The sanctions decision coincided with a renewed debate over the trajectory of the war. Kyiv has pressed the United States and European partners for long-range strike capabilities, while Putin warned that any deep-penetration attacks into Russian territory would trigger a “very serious, if not overwhelming” response. Trump, who has oscillated between calling for an immediate ceasefire and urging a comprehensive peace settlement, said he had canceled the planned summit with Putin because it did not appear likely to deliver results, though he left open the possibility of meeting in the future. Putin characterized the summit as postponed, noting the two leaders last met in Alaska in August. Moscow’s conditions for ending the war—regarded in Kyiv and many European capitals as unacceptable and tantamount to capitulation—remain unchanged.
In Brussels, European Union leaders met with Ukrainian President Volodymyr Zelenskiy and committed to meeting Ukraine’s urgent financing needs for the next two years. They stopped short, however, of explicitly endorsing a plan to leverage frozen Russian assets to back a large loan to Kyiv, after Belgium raised legal and financial concerns; Russia warned of a “painful response” to any seizure of its property. Zelenskiy welcomed the new U.S. sanctions as “very important,” while arguing that still greater pressure would be necessary to move Moscow toward a ceasefire. Meanwhile, Lithuania said two Russian military aircraft briefly violated its airspace, prompting a NATO response and a formal protest; Russia denied the incursion.
Separately, the EU adopted its 19th sanctions package targeting Russia, including a ban on Russian liquefied natural gas imports and measures against entities such as Chinese refiners and Central Asian banks. Since 2022 the EU has reduced its dependence on Russian energy by about 90%, yet more than €11 billion in Russian energy still entered the bloc in the first eight months of the year, with LNG now the largest remaining channel. Russia’s oil and gas receipts—down roughly 21% year-on-year—still supply about a quarter of the federal budget and remain the principal funding stream for the war, now in its fourth year. The cumulative aim of U.S. and EU measures is to compress that revenue while limiting collateral disruptions to global supply.
The immediate market response has shown the delicate balance: sanctions intended to erode Moscow’s fiscal capacity also risk tightening supply and lifting prices if alternative barrels cannot quickly replace sanctioned volumes or if traders and insurers retreat from the Russian trade. For Washington and Brussels, the next phase will test whether coordinated enforcement, carve-outs calibrated to prevent acute shortages, and continued support for Ukrainian defense can together shift Moscow’s calculus while avoiding excessive shocks to consumers. For the Kremlin, the challenge will be to sustain production, redirect flows, and preserve budget stability under intensifying external pressure and an increasingly complex trading environment.
Gros News 
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