US and EU Impose New Sanctions on Russia Amid Ongoing War in Ukraine

Strategic Insights -

The United States and the European Union have imposed a new round of sanctions on Russia in an effort to cut into the country's oil and gas export earnings that fund its war against Ukraine. The sanctions target Russia's biggest oil companies, Rosneft and Lukoil, and their customers in India and China, who could face retaliation if they continue to deal with the companies. The EU is also phasing out shipments of Russian liquefied natural gas by the end of next year and targeting cryptocurrency issuers and exchanges that Russia has used to skirt restrictions on its financial dealings.

Key Takeaways:

  • The US Treasury Department has sanctioned Rosneft and Lukoil, two of Russia's largest oil companies, to pressure Russian President Vladimir Putin to agree to an immediate ceasefire in Ukraine.
  • The sanctions threaten customers in India and China with retaliation, including being sanctioned themselves, if they continue to deal with Rosneft and Lukoil.
  • The EU is phasing out shipments of Russian liquefied natural gas by the end of next year and targeting cryptocurrency issuers and exchanges that Russia has used to skirt restrictions.
  • Rosneft and Lukoil account for roughly half of Russia's oil exports, and the US Treasury Department estimates that the sanctions will not significantly affect energy costs for US consumers.
  • Russian oil exports have supplied 30% to 50% of state revenues in the past decade.
  • India is the largest buyer of Russian oil, at about 2.1 million barrels per day, followed by China at 1.5 million.
  • Refineries in India and China that buy Russian oil could face US sanctions if they deal with Rosneft and Lukoil.
  • The sanctions on Rosneft and Lukoil are expected to take effect on November 21, giving traders a chance to wind down business with the companies.

Statistics:

  • Russia's oil exports have supplied 30% to 50% of state revenues in the past decade.
  • Rosneft and Lukoil account for roughly half of Russia's oil exports.
  • The biggest customers for Russian oil are China, at about 2.1 million barrels per day, and India, at 1.5 million.
  • Refineries in India and China that buy Russian oil could face US sanctions if they deal with Rosneft and Lukoil.

Sources:

  • [Associated Press]
  • [US Treasury Department]
  • [European Union]
  • [Johannes Rauball, senior crude oil analyst at data analytics firm Kpler]
  • [Maria Perrotta Berlin, sanctions expert at the Stockholm Institute of Transition Economics]