The US Treasury Department said on Monday that US sanctions against Russian oil giants Rosneft and Lukoil are already reducing Russia's oil revenues and are likely to lead to a long-term reduction in Russian oil sales, UNN reports with reference to Reuters.
Details
The US Treasury Department's Office of Foreign Assets Control (OFAC) said that an analysis of the initial market impact of the sanctions announced on October 22 showed that they "are having the intended effect, reducing Russia's revenues by lowering the price of Russian oil and, consequently, the country's ability to finance its war efforts against Ukraine."
The Treasury's actions were among the toughest US sanctions since Russia's full-scale invasion of Ukraine in February 2022 and the first direct sanctions imposed by President Donald Trump against Russia since he took office in January.
The sanctions set a deadline of November 21 for companies to cease cooperation with Rosneft and Lukoil. Violators could be cut off from the dollar financial system.
However, the publication writes, it remained unclear how the US Treasury would enforce the sanctions. The two largest buyers of Russian oil were China and India.
OFAC's analysis stated that several key grades of Russian oil were selling at multi-year lows, and noted that nearly a dozen major Indian and Chinese buyers of Russian oil had announced their intention to suspend purchases of Russian oil for December delivery.
LSEG Workspace data on Monday showed that on November 12, the price of benchmark Urals crude, shipped at Russia's Black Sea oil hub of Novorossiysk, was $45.35 per barrel, the lowest since March 2023. At that time, Russia was just beginning to form a "shadow fleet" of tankers to avoid the $60 per barrel price cap set by the Group of Seven countries in December 2023.
On November 12, Brent crude futures traded at $62.71, and on Monday at $64.03. The price of Urals crude from Novorossiysk rose to $47.01 on Monday. Oil loading at the Black Sea port resumed after a halt due to a drone and missile attack.
Novorossiysk port resumes oil loading after Ukrainian attack - Reuters16.11.25, 20:24 • [views_9699]
Earlier this month, Reuters reported that discounts on Russian oil compared to Brent had increased, as major Indian and Chinese refineries cut purchases in response to US sanctions.
A US Treasury official said the sanctions were "draining Putin's war machine," and the department was "prepared to take further action if necessary to end the senseless killing" in Ukraine.