In a sweeping escalation of economic pressure on Russia, the U.S. Department of the Treasury said that it will be imposing full blocking sanctions on its two largest oil companies, Rosneft and Lukoil, citing Moscow’s “lack of serious commitment to a peace process to end the war in Ukraine.”
Violators Will Face ‘Stiff Penalties’
Speaking from the Oval Office on Wednesday, President Donald Trump said, “These are tremendous sanctions, these are very big,” during a meeting with NATO Secretary General Mark Rutte. “We hope that they won't be on for long. We hope that the war will be settled,” he said.
The Treasury Department's measures effectively cut off Rosneft and Lukoil from the U.S. banking system, barring them from operating in dollars. Violators, including foreign financial institutions, face “stiff penalties, including cascading sanctions.”
The move comes following Russia’s overnight attacks on Ukraine that killed seven people, including two children, alongside the apparent cancellation of the Trump-Putin summit in Hungary that was planned for next week, according to a report by The Washington Post.
The Kremlin also conducted a training exercise involving its nuclear arms on Wednesday, which included the launch of ballistic missiles, reportedly aimed at deterring Western support to Ukraine.
On Wednesday, in a post on X, U.S. Treasury Secretary Scott Bessent called on Russian President Vladimir Putin for an end to this war and an immediate ceasefire.
Bessent said that the Treasury Department “is prepared to take further action if necessary to support President Trump's effort to end yet another war,” while urging American allies to join the effort and “adhere to these sanctions.”
Crude Oil Futures Rally, As Stock Futures Trade Mixed
Crude oil futures are rallying on the news, up 2.39%, trading at $59.89 per barrel following weeks of steady declines in the commodity.
Major U.S. stock indices are trading mixed, with the S&P 500 Futures up 0.07%, or 4.25 points, trading at 6,741.75, followed by Nasdaq Futures at 25,072.75, up 0.14%, or 34.50, and finally Dow Jones Futures, which is down 0.13%, or 63 points, trading at 46,720.00.
Japan’s benchmark Nikkei 225 opened lower on Thursday, currently down 1.38% trading at 48,625.15, with export-oriented and heavy industry stocks rallying, while semiconductors and other electronics stocks leading the decline.
Meanwhile, the U.S. Dollar Index (DXY) rose 0.12%, trading at 99.015, while gold spot prices head lower by 0.31%, trading at $4,087.86 an ounce.
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