U.S. Sanctions Squeeze Russian Oil Revenues

U.S. sanctions on Russian oil firms Rosneft and Lukoil are impacting Russia's oil revenue, reducing its capacity to finance its military actions in Ukraine. The measures force a decrease in sales and pricing of Russian crude oil, primarily affecting major buyers like China and India.

On Monday, the U.S. Treasury announced that sanctions targeting Russian oil giants Rosneft and Lukoil are effectively curbing Russia's oil revenue while also likely decreasing long-term sales. These sanctions, declared by the Treasury's Office of Foreign Assets Control on October 22, are aimed at reducing Russia's ability to fund its military actions against Ukraine.

Deemed one of the U.S.'s strongest sanctions since Russia's expanded invasion of Ukraine in February 2022, this sweeping financial action by the Treasury sets a deadline of November 21 for international firms to halt dealings with Rosneft and Lukoil or risk being isolated from the dollar-based financial network.

Despite uncertainties surrounding enforcement, the fallout from these sanctions is evident as China and India scale back Russian oil purchases. LSEG Workspace data indicates Urals crude traded at its lowest level since March 2023, while the Treasury upholds its commitment to starving Russia's war funding, hinting at further actions if necessary.

(With inputs from agencies.)