Crude oil prices surged to a two-week high on Thursday after the US slapped sanctions on Russian energy giants Rosneft and Lukoil, along with dozens of their subsidiaries—a move aimed at cutting off a key source of funding for the Kremlin’s war in Ukraine.
The sanctions, aimed at forcing Russia to declare a ceasefire if not end the war, rattled global energy markets, prompting major refiners in China and India to reconsider their Russian oil imports. Brent crude jumped 5.4 percent to USD65.99 per barrel, while U.S. West Texas Intermediate soared 5.6 percent to USD61.79.
Dubai crude, the oil benchmark used in the Philippines, has reportedly rose 2.2 percent to USD65.24. barrel, suggesting a fresh round of oil price increases.
The administration of US President Donald Trump said the sanctions were part of its escalating efforts to choke off financial support for Russia’s military campaign, now entering its fourth year and the largest land war in Europe since World War II.
“Given President Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine,” said Treasury Secretary Scott Bessent. “We encourage our allies to join us and adhere to these sanctions.”
Together, Rosneft and Lukoil account for just over five percent of global oil supply and hold stakes in major refineries across Bulgaria, Germany, India, Iraq, and Romania.
Under the new restrictions, all assets of Rosneft, Lukoil, and their affiliates under U.S. jurisdiction are frozen and must be reported to the Treasury’s Office of Foreign Assets Control (OFAC). The sanctions also bar U.S. entities from engaging in any transactions with the blacklisted companies unless specifically authorized by OFAC.
Analysts warn the move could further tighten global oil supplies and heighten price volatility as markets absorb the shock of losing two of the world’s largest crude exporters.
