On Wednesday, October 22, US Treasury Secretary Benson stated that in light of Russian President Putin’s refusal to end the war with Ukraine, the Treasury Department has imposed sanctions on Russia’s two largest oil companies. These companies are accused of providing funds for Putin’s war machine. This move indicates that President Trump’s patience with Russian President Putin is wearing thin.
According to the announcement released by the Treasury Department, the Office of Foreign Assets Control (OFAC) has imposed sanctions on the Russian energy giants, Rosneft and Lukoil, on Wednesday.
“Now is the time to stop the killing and cease fire immediately,” Benson said in the announcement. “The Treasury Department is prepared to take further actions when necessary to support President Trump’s efforts to end yet another war. We encourage our allies to join us in complying with these sanctions.”
The announcement further stated that today’s action intensifies the pressure on Russia’s energy industry and weakens the Kremlin’s ability to fund its war machine and support its struggling economy.
“The United States will continue to advocate for a peaceful resolution to the war, and permanent peace depends entirely on whether Russia is willing to engage in negotiations sincerely,” the announcement said.
Rosneft and Lukoil are Russia’s two largest oil producers. Rosneft is a state-owned company led by Putin’s close ally Igor Sechin.
According to Bloomberg, the oil exports of these two energy giants account for nearly half of Russia’s total oil exports, approximately 2.2 million barrels per day in the first half of this year. Tax revenue from the oil and gas industry contributes about a quarter of Russia’s federal budget.
Bloomberg’s analysis suggests that the sanctions on these two Russian oil giants are the toughest measure the Trump administration has taken so far to pressure Putin to end the war. This decision marks a significant shift in President Trump’s stance, as he announced last week his intention to meet with Putin in the coming weeks and expressed belief that Putin wants to end the war. However, on Tuesday, Trump hinted at a possible change of mind, stating he does not want to have a meeting with Putin that would be a waste of time.
President Trump mentioned the latest Treasury Department sanctions during his meeting with NATO Secretary General in the Oval Office on Wednesday, describing them as severe and significant sanctions on Russia’s major oil companies.
“I just felt it was time,” the President said. “We hope these sanctions won’t last long. We hope the war can be resolved.”
Regarding the meeting with Putin, Trump said, “I just felt it was not quite right. It felt like we couldn’t achieve the goals we needed to, so I called it off.” He indicated that a meeting will be held in the future.
The Treasury Department’s action on Wednesday was a measure considered by former President Biden as his presidential term was ending. However, due to concerns that the global energy market might be rattled and lead to a surge in oil prices, he ultimately abandoned this move. Given Trump’s emphasis on maintaining low gasoline prices, this action signifies a significant gamble and indicates that his patience with Putin may be running out.
The UK also imposed sanctions on Rosneft and Lukoil a week ago. The European Union is set to announce a new set of sanctions on Thursday, which includes a ban on importing Russian liquefied natural gas. This plan aims to further cut off Moscow’s energy income and pressure Putin into negotiations.