US Treasury: Sanctions against Rosneft and Lukoil are already reducing Russia’s oil revenues

The U.S. Treasury Department said that U.S. sanctions against Russian oil giants Rosneft and Lukoil are already reducing Russia’s oil revenues and are likely to reduce Russian oil sales in the long term.

Source: Reuters

Details: The U.S. Treasury Department’s Office of Foreign Assets Control said an analysis of the initial impact of the sanctions announced on October 22nd showed that they “have the desired effect of reducing Russian revenues by reducing the price of Russian oil and, therefore, the country’s ability to finance military actions against Ukraine.”

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OFAC’s analysis showed that several major grades of Russian oil were selling at their lowest prices in years and noted that nearly a dozen major Indian and Chinese buyers of Russian oil had announced plans to suspend purchases of Russian oil with deliveries in December.

LSEG Workspace data on Monday showed that benchmark Urals crude, loaded at Novorossiysk, traded at $45.35 a barrel on Nov. 12, the lowest level since March 2023.

At the time, Russia was just beginning to assemble a “shadow fleet” of tankers to avoid the G7-imposed price cap of $60 per barrel, introduced in December 2023.

US sanctions introduced in October set a deadline of November 21 for companies to end cooperation with Rosneft and Lukoil.

Violators may be disconnected from the dollar-based financial system.

The two largest buyers of Russian oil are China and India.

We will remind:

• United States introduced sanctions against the largest Russian oil companies “Rosneft” and “Lukoil”, as well as their subsidiaries. And the European Union in the morning finally approved 19th package of sanctions against Russia by written procedure.
• The sanctions include the freezing of all assets of Rosneft and Lukoil in the United States and the prohibition of all American companies from conducting any business with these Russian companies. Some Chinese state-owned oil giants have suspended purchases of sea-borne Russian oil after the US imposed sanctions on Rosneft and Lukoil.
• Russian oil giant Lukoil has announced that it is in talks with potential buyers of its foreign assets following sanctions from Great Britain and the United States, as well as due to the collapse of the deal with Gunvor.
• The administration of US President Donald Trump has prepared additional sanctions that could be applied to key sectors of the Russian economy if Kremlin leader Vladimir Putin continues to delay ending the war.

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