Oil prices jump after U.S. imposes new sanctions on Russia

Oil prices surged on Thursday after U.S. President Donald Trump unveiled sweeping sanctions against Russia’s two largest oil producers, Rosneft and Lukoil, a move that rattled global energy markets.

Brent crude climbed more than 5 percent to $66.05 a barrel, while West Texas Intermediate (WTI) gained over 6 percent to $62.04, as traders assessed the likelihood of tighter Russian exports.

The sanctions, announced late Wednesday in Washington, represent the first major Russia sanction of Trump’s second term and mark a sharp shift from his earlier reluctance to target Russia’s energy sector directly. The measures block the companies and dozens of their subsidiaries from accessing U.S. financial systems and bar American entities from doing business with them.

“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 Secretary Scott Bessent said in a statement, urging allies to adopt similar restrictions.

The European Union had already imposed its 19th round of sanctions last week, including a ban on Russian liquefied natural gas imports, while the United Kingdom introduced matching penalties on the same firms.

Trump’s decision marks a departure from his earlier approach, which favored tariffs and trade restrictions over direct sanctions. Earlier this year, his administration imposed 25 percent tariffs on Indian goods in protest against India’s continued purchases of discounted Russian oil. China, another major buyer of Russian crude, has so far avoided similar penalties.

Since Western nations introduced a $60 price cap on Russian oil in 2022, Moscow has rerouted most of its exports from Europe to Asia, particularly to India and China, blunting some of the impact of previous sanctions.

Markets react

Oil prices had slipped earlier in the week amid worries about slowing demand and rising U.S.–China trade friction. The sudden sanctions announcement reversed that trend, reigniting concerns over global supply.

Analysts said the move could reshape energy flows if enforced aggressively. Others noted the absence of sanctions on banks or foreign buyers might limit the measures’ bite.

Trump, who cancelled a planned meeting with Putin in Hungary, said he hoped the restrictions would be temporary, acknowledging the risks prolonged sanctions pose to the U.S. dollar’s global dominance.