President Donald Trump’s sanctions on Russian oil giants Lukoil and Rosneft are biting into Moscow’s ability to fund its war effort, according to a Treasury Department memo.
The Initial Market Reaction report by the Office of Foreign Assets Control found that the sanctions that Trump placed on Russian energy last month are restricting the cash Moscow can dedicate to its war efforts.
“President Trump has targeted Russia’s two largest oil companies in one of the most impactful Treasury actions to date. Russian oil is now selling at multi-year lows, starving Putin’s war machine. President Trump is the peace-and-prosperity President, and Treasury is prepared to take further action if necessary to end the senseless killing,” a Treasury spokesperson told The Daily Wire.
The Office of Foreign Assets Control initial assessment of the tariffs found that they are having their intended effect by reducing oil revenues to Moscow by “lowering the price of Russian oil and therefore the country’s ability to fund its war effort against Ukraine,” according to a summary of the office’s assessment.
“While there are multiple prices of Russian oil depending on grade and location, various grades are trading well below all other international prices. Moreover, several key Russian grades are selling at multi-year lows, widening their spreads to global benchmarks. This is testament to the fact that demand for Russian oil is plunging, driven by the efficacy of U.S. sanctions,” the summary found.
The Treasury assessment also noted that some of Russia’s biggest customers, namely India and China, have cut back their purchases of Russian energy in the wake of the tariffs
“Nearly a dozen major Indian and Chinese purchasers of Russian oil have announced intentions to pause their purchases of Russian December deliveries,” the Office of Foreign Assets Control found.
The Treasury leveled the tariffs on the Russian oil giants on October 22.
“Now is the time to stop the killing and for an immediate ceasefire,” said Treasury Secretary Scott Bessent at the time. “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. Treasury is 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.”
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