The oil price has jumped after Donald Trump announced new sanctions on Russia’s biggest producers, as the US president ramps up pressure on Vladimir Putin to end the war in Ukraine.
Brent crude increased by 3.5% to $64.53 a barrel on the back of the fresh restrictions on Moscow’s two biggest oil companies, Rosneft and Lukoil.
All assets in the US belonging to the two fossil fuel firms have been frozen, and American companies and individuals will be barred from doing business with them.
The US is also threatening secondary sanctions on foreign financial institutions that do business with Rosneft and Lukoil, which could include banks that facilitate sales of Russian oil in China, India and Turkey.
In a sign this pressure may already be having an impact, reports suggest refiners in India are preparing to sharply reduce their imports of Russian oil. Reliance Industries, the top Indian buyer of Russian crude, plans to reduce or halt completely imports, according to Reuters, which cited two sources familiar with the matter.
India has been one of the biggest buyers of discounted seaborne Russian crude oil since the war in Ukraine, prompting Trump to imposed punitive 50% tariffs on most Indian goods in August.
Wednesday’s Russia sanctions are the first Trump has imposed against the country since he returned to the White House in January. The US president, speaking to reporters in the Oval Office, described the measures as “tremendous”.
He said: “These are very big ones that are against their two big oil companies, and we hope that they won’t be on for long. We hope that the war will be settled.”
Trump added that he hoped Putin would continue negotiations over Ukraine. “Hopefully he’ll become reasonable, and hopefully Zelensky will be reasonable,” he said. “You know, it takes two to tango, as I say, and we’ll find out.”
The EU also announced it would impose its own sanctions, expected to be enacted on Thursday, including a ban on Russian liquefied natural gas imports.
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Scott Bessent, the US treasury secretary, said the US administration was “prepared to take further action if necessary to support President Trump’s effort to end yet another war. We encourage our allies to join us in and adhere to these sanctions.”
The British government imposed sanctions on Rosneft and Lukoil last week. The EU has imposed sanctions on Rosneft, which is owned by the Russian state, but not Lukoil, which is privately owned. That is largely because of exemptions for Hungary and Slovakia, which buy Russian oil.
Trump also confirmed on Wednesday that he had cancelled a planned summit with Putin. He said: “It didn’t feel right to me. It didn’t feel like we were going to get to the place we have to get, so I cancelled it. But we’ll do it in the future.”
The oil price is now on track for its biggest rise since July, according to analysts at Deutsche Bank.
