Trump piles on oil sanctions against Putin

President Trump has announced new oil sanctions against Russia after Moscow’s refusal to consider a ceasefire in Ukraine with the battlelines frozen as they stand today. Which Russian oil companies will be targeted? They have been named as Rosneft and Lukoil, Russia’s two biggest oil companies. Rosneft is responsible for nearly half of Russian oil production. It is also the largest independent gas producer in Russia. Lukoil is the second largest oil company in Russia. The two companies combined account for more than three million barrels of Russian crude oil exported every day. Which countries still buy oil from Rosneft and Lukoil? A The two biggest importers of Russian oil are China, with about two million barrels a day, and India with 1.6 million barrels each day. But other countries still trading in oil with Russia include Turkey, Germany, Hungary, Slovakia, South Korea, Brazil and Japan. Why does Germany still buy oil from Russia? Rosneft has stakes in several key German refineries. The German government took control of the refineries under a special trusteeship to safeguard energy supplies after Russia invaded Ukraine in February, 2022. The trusteeship allows Berlin to manage Rosneft’s stakes in the refineries. When the UK announced fresh sanctions against Rosneft and Lukoil this month, a special licence was issued allowing banks and businesses to continue working with the German subsidiaries of Rosneft because they were under state control. How much money does Russia make from these companies? The Russian economy is dependent on the exploitation of its huge natural resources, particularly oil and natural gas. Rosneft announced in August that its net income had fallen by 68 per cent to $3 billion for the first half of the year due to weak oil prices. Lukoil has also suffered from changing markets. In 2024, the company declared that net profits were down by 26.5 per cent to $10.12 billion. QWill this impact ordinary Russians? The main impact of the new sanctions is aimed at harming Russia’s war economy which has been created by President Putin to finance the war in Ukraine. But the sanctions will cause rising oil prices and this will affect the price of petrol across the country. This will be a double blow for the Russian people who have already been forced to join long queues at petrol stations because of a shortage of fuel following Ukrainian drone strikes on Russian oil refineries. Are Tomahawks off the table? A For the moment, Trump has said he will not be considering supplying Tomahawk cruise missiles to Ukraine because of the fear of escalating the war. But the request from President Zelensky remains on the table. Trump is likely to see how the new oil sanctions work in forcing Putin to negotiate an end to the war before returning to the Tomahawk issue. Which targets has Ukraine been striking inside Russia? A Even without long-range Tomahawks, Ukraine has successfully targeted oil refineries deep inside Russia, deploying home-made drones and cruise missiles. In recent months, helped by targeting data supplied by US and British intelligence systems, Ukraine has hit more than 20 of Russia’s 38 large oil refineries since January. This week, Ukraine used Britain’s Storm Shadow missiles to hit a Russian chemical plant which produces gunpowder, explosives and rocket fuel. The plant was in an industrial complex in Bryansk, about 240 miles southwest of Moscow. What other leverage does the US have left? The fresh oil sanctions will be a huge blow to Russia’s economy. But Trump could also further target countries still buying Russian oil by applying much larger secondary tariffs on China and India, the two biggest purchasers of Russian oil. India, in particular, could be forced to turn to the US for oil imports which would have a long-term impact on the Russian economy. BUY MY NEW SPY THRILLER, AGENT REDRUTH, PUBLISHED BY ROWANVALE BOOKS AND AVAILABLE FROM AMAZON.