What lies behind Trump’s disruptive strategy, what he’s asking from China, and the deal he’s preparing.
Donald Trump appears to be setting the stage for a nightmarish winter in Europe following his announcement of sanctions on Russia’s largest oil producers — a move aimed at pressuring Moscow to negotiate an end to the war in Ukraine.
The price of Brent crude surged by several percentage points, nearing $65 per barrel, while West Texas Intermediate climbed toward $61, after the United States added Russian state oil giants Rosneft PJSC and Lukoil PJSC to its blacklist, citing Moscow’s lack of commitment to peace in Ukraine.
Refinery executives in India — one of the key buyers of Russian crude — stated that the restrictions would make it impossible to continue the current flow of oil supplies.
A 180-degree turn
These sanctions mark a complete reversal for Trump, who just last week had announced plans to meet with Vladimir Putin in the coming weeks and had repeatedly said he believed Russia wanted to end the war.
In recent days, however, he stated that he did not wish to hold a “pointless meeting.”
“The sanctions signal a shift in President Trump’s approach to Russia and open the door to stricter measures in the future, which may affect Russia’s oil exports,” said Warren Patterson, Head of Commodities Strategy at ING Groep NV in Singapore.
“The uncertainty lies in how effective these sanctions will be and what impact they’ll have on exports,” he added.
Following the sanctions announcement, Trump said he planned to speak with Chinese President Xi Jinping about China’s purchases of Russian oil during a scheduled meeting next week in South Korea.
He also said that Indian Prime Minister Narendra Modi had assured him that India would reduce its purchases.
The importance of China and India
Both countries became the largest buyers of Russian oil after the war in Ukraine began, as other nations avoided Moscow due to the invasion.
Trump imposed heavy tariffs on India for this trade but has yet to take action against China.
Last week, the United Kingdom imposed sanctions on two Chinese energy companies handling Russian energy flows, as well as on Rosneft and Lukoil themselves.
Uncertainty
“This is certainly one of the most significant steps the U.S. has taken, but I think it will be limited by the widespread use of illicit financial networks,” said Rachel Ziemba, an analyst at the Center for a New American Security in Washington.
“It all depends on whether China and India fear further escalation of secondary sanctions.”
Rosneft, led by Putin’s close ally Igor Sechin, and private oil producer Lukoil together account for nearly half of Russia’s total oil exports, according to Bloomberg estimates.
Taxes from the oil and gas sector make up roughly 25% of the state budget.
The U.S. sanctions represent a radical policy shift, as previous efforts — such as the G7 oil price cap — aimed to curb Kremlin revenues without disrupting global supply or driving up prices.
“The most significant move”
“The market will need time to digest exactly what these sanctions mean,” said Vandana Hari, founder of market analysis firm Vanda Insights, adding that they are likely to be “a major concern for refineries in India and China.”
Meanwhile, the European Union adopted a new sanctions package targeting 45 entities that helped Russia’s OPEC+ production bypass restrictions — including 12 companies in China and Hong Kong.
Sanctions and the strategy of pressure
Trump’s decision to impose sanctions on Rosneft and Lukoil underscores his intent to exert pressure on Russia, though he is reportedly unconvinced that these measures will have a decisive impact.
Instead, Trump appears to be keeping negotiating leverage, waiting for the right moment to offer both Russia and Europe a settlement acceptable to all sides.
His strategy aims to pressure Russia into concessions on key strategic goals — such as maintaining influence in Ukraine — while pushing for broader Western recognition of its control over certain areas.
Despite inconsistencies in his statements, it is clear that Trump seeks to capitalize on the current situation to achieve a geopolitical deal, while retaining flexibility to act when he deems necessary.
The future of negotiations
The big question now is whether Trump will succeed in pressuring Europe and Ukraine to accept Russia’s proposals, acknowledging its core demands regarding Ukraine.
All indications suggest a meeting with Putin is inevitable, and the critical moment for a shift in direction could come soon.
As it stands, the timing and location may be less important than the outcome.
Why target Rosneft and Lukoil
Beyond canceling his meeting with Putin, Trump also announced new, sweeping sanctions on Russia’s two largest oil companies, Rosneft and Lukoil.
Trump called on Russia to agree immediately to a ceasefire and to solidify its military positions in Ukraine, while expressing hope that the sanctions would last only a limited period.
The scope of the new sanctions
The new U.S. measures extend beyond the parent companies to all subsidiaries in which Rosneft or Lukoil hold a stake of over 50%.
The sanctions cover the entire production and export chain of both oil giants — including refineries, production units, and transport companies.
All assets and financial interests of Rosneft and Lukoil in the U.S., or under the control of American citizens, will be frozen.
The U.S. also bans any transactions with these firms by American individuals and legal entities, as well as any operations routed through the U.S. financial system.
Moreover, foreign financial institutions engaging in significant transactions with these Russian companies risk secondary sanctions, including bans on opening U.S. accounts or restrictions on dollar-based transactions.
Trump has directly linked the sanctions to his demand for an immediate ceasefire in Ukraine, leaving open the possibility that the measures could be lifted if such an agreement is reached.
India’s position
India, a key buyer of Russian oil through Rosneft, may halt purchases due to fears of secondary U.S. sanctions.
Indian conglomerate Reliance Industries has a long-term contract with Rosneft, and Indian companies now expect supplies to be disrupted by the new restrictions, given the threat of financial isolation.
Impact on Kremlin policy
Russia’s reaction to the sanctions remains uncertain, though some experts believe Moscow will find ways to circumvent the measures — something it has proven capable of in the past.
As Thomas Graham, an expert on international relations, noted:
“If the White House believes sanctions will bring radical change to Putin’s policy, it is mistaken.
Sanctions take time to work, and the Kremlin is remarkably skilled at evading them.”
Assessing the consequences
The decision to sanction Russia’s two biggest oil producers is viewed by some analysts as a high-risk move, potentially destabilizing global energy markets.
Fuel costs remain a key concern for the U.S. administration, which seeks to keep prices low, yet these sanctions could push prices higher worldwide, affecting the global economy.
www.bankingnews.gr
The price of Brent crude surged by several percentage points, nearing $65 per barrel, while West Texas Intermediate climbed toward $61, after the United States added Russian state oil giants Rosneft PJSC and Lukoil PJSC to its blacklist, citing Moscow’s lack of commitment to peace in Ukraine.
Refinery executives in India — one of the key buyers of Russian crude — stated that the restrictions would make it impossible to continue the current flow of oil supplies.
A 180-degree turn
These sanctions mark a complete reversal for Trump, who just last week had announced plans to meet with Vladimir Putin in the coming weeks and had repeatedly said he believed Russia wanted to end the war.
In recent days, however, he stated that he did not wish to hold a “pointless meeting.”
“The sanctions signal a shift in President Trump’s approach to Russia and open the door to stricter measures in the future, which may affect Russia’s oil exports,” said Warren Patterson, Head of Commodities Strategy at ING Groep NV in Singapore.
“The uncertainty lies in how effective these sanctions will be and what impact they’ll have on exports,” he added.
Following the sanctions announcement, Trump said he planned to speak with Chinese President Xi Jinping about China’s purchases of Russian oil during a scheduled meeting next week in South Korea.
He also said that Indian Prime Minister Narendra Modi had assured him that India would reduce its purchases.
The importance of China and India
Both countries became the largest buyers of Russian oil after the war in Ukraine began, as other nations avoided Moscow due to the invasion.
Trump imposed heavy tariffs on India for this trade but has yet to take action against China.
Last week, the United Kingdom imposed sanctions on two Chinese energy companies handling Russian energy flows, as well as on Rosneft and Lukoil themselves.
Uncertainty
“This is certainly one of the most significant steps the U.S. has taken, but I think it will be limited by the widespread use of illicit financial networks,” said Rachel Ziemba, an analyst at the Center for a New American Security in Washington.
“It all depends on whether China and India fear further escalation of secondary sanctions.”
Rosneft, led by Putin’s close ally Igor Sechin, and private oil producer Lukoil together account for nearly half of Russia’s total oil exports, according to Bloomberg estimates.
Taxes from the oil and gas sector make up roughly 25% of the state budget.
The U.S. sanctions represent a radical policy shift, as previous efforts — such as the G7 oil price cap — aimed to curb Kremlin revenues without disrupting global supply or driving up prices.
“The most significant move”
“The market will need time to digest exactly what these sanctions mean,” said Vandana Hari, founder of market analysis firm Vanda Insights, adding that they are likely to be “a major concern for refineries in India and China.”
Meanwhile, the European Union adopted a new sanctions package targeting 45 entities that helped Russia’s OPEC+ production bypass restrictions — including 12 companies in China and Hong Kong.
Sanctions and the strategy of pressure
Trump’s decision to impose sanctions on Rosneft and Lukoil underscores his intent to exert pressure on Russia, though he is reportedly unconvinced that these measures will have a decisive impact.
Instead, Trump appears to be keeping negotiating leverage, waiting for the right moment to offer both Russia and Europe a settlement acceptable to all sides.
His strategy aims to pressure Russia into concessions on key strategic goals — such as maintaining influence in Ukraine — while pushing for broader Western recognition of its control over certain areas.
Despite inconsistencies in his statements, it is clear that Trump seeks to capitalize on the current situation to achieve a geopolitical deal, while retaining flexibility to act when he deems necessary.
The future of negotiations
The big question now is whether Trump will succeed in pressuring Europe and Ukraine to accept Russia’s proposals, acknowledging its core demands regarding Ukraine.
All indications suggest a meeting with Putin is inevitable, and the critical moment for a shift in direction could come soon.
As it stands, the timing and location may be less important than the outcome.
Why target Rosneft and Lukoil
Beyond canceling his meeting with Putin, Trump also announced new, sweeping sanctions on Russia’s two largest oil companies, Rosneft and Lukoil.
Trump called on Russia to agree immediately to a ceasefire and to solidify its military positions in Ukraine, while expressing hope that the sanctions would last only a limited period.
The scope of the new sanctions
The new U.S. measures extend beyond the parent companies to all subsidiaries in which Rosneft or Lukoil hold a stake of over 50%.
The sanctions cover the entire production and export chain of both oil giants — including refineries, production units, and transport companies.
All assets and financial interests of Rosneft and Lukoil in the U.S., or under the control of American citizens, will be frozen.
The U.S. also bans any transactions with these firms by American individuals and legal entities, as well as any operations routed through the U.S. financial system.
Moreover, foreign financial institutions engaging in significant transactions with these Russian companies risk secondary sanctions, including bans on opening U.S. accounts or restrictions on dollar-based transactions.
Trump has directly linked the sanctions to his demand for an immediate ceasefire in Ukraine, leaving open the possibility that the measures could be lifted if such an agreement is reached.
India’s position
India, a key buyer of Russian oil through Rosneft, may halt purchases due to fears of secondary U.S. sanctions.
Indian conglomerate Reliance Industries has a long-term contract with Rosneft, and Indian companies now expect supplies to be disrupted by the new restrictions, given the threat of financial isolation.
Impact on Kremlin policy
Russia’s reaction to the sanctions remains uncertain, though some experts believe Moscow will find ways to circumvent the measures — something it has proven capable of in the past.
As Thomas Graham, an expert on international relations, noted:
“If the White House believes sanctions will bring radical change to Putin’s policy, it is mistaken.
Sanctions take time to work, and the Kremlin is remarkably skilled at evading them.”
Assessing the consequences
The decision to sanction Russia’s two biggest oil producers is viewed by some analysts as a high-risk move, potentially destabilizing global energy markets.
Fuel costs remain a key concern for the U.S. administration, which seeks to keep prices low, yet these sanctions could push prices higher worldwide, affecting the global economy.
www.bankingnews.gr
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