The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced new sanctions against Russia’s two largest oil companies, Rosneft and Lukoil, citing Russia’s continued unwillingness to engage in a peace process to end the war in Ukraine. The move is intended to increase economic pressure on Russia’s energy sector and limit the Kremlin’s ability to fund its military operations.
“Now is the time to stop the killing and for an immediate ceasefire,” said Secretary of the Treasury Scott Bessent. “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.”
The sanctions designate Rosneft and Lukoil under Executive Order 14024 for their activities in the Russian energy sector. Both companies are major players in the global oil and gas industry, with operations that include exploration, production, refining, and distribution.
In addition to the parent companies, a number of subsidiaries based in Russia have also been designated. These subsidiaries are involved in various aspects of oil and gas production, exploration, refining, and technological development. All entities owned 50 percent or more by Rosneft or Lukoil are now subject to blocking measures, even if not individually named by OFAC.
As a result of these sanctions, any property or interests in property belonging to the designated entities that are within the United States or controlled by U.S. persons are blocked and must be reported to OFAC. U.S. persons are generally prohibited from engaging in transactions involving these entities unless authorized by OFAC.
Violations of these sanctions can result in civil or criminal penalties for both U.S. and foreign individuals or organizations. OFAC enforces these measures on a strict liability basis, meaning penalties may be imposed regardless of intent.
Foreign financial institutions that conduct significant transactions with the sanctioned entities also risk being targeted by U.S. sanctions. OFAC has issued updated guidance for foreign financial institutions regarding these risks.
OFAC notes that its authority includes not only the ability to add individuals and entities to the Specially Designated Nationals (SDN) List but also to remove them in accordance with the law. The stated goal of these sanctions is to encourage a change in behavior rather than simply to punish.
Entities added to the SDN List under E.O. 14024 may also face additional export restrictions from the Department of Commerce’s Bureau of Industry and Security.
Further information about the individuals and entities sanctioned is available through the U.S. Department of the Treasury.
