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, as part of efforts to increase pressure on Russia over its actions in Ukraine. The move is intended to limit the Kremlin’s ability to fund its ongoing military activities and further weaken the Russian economy.
“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.”
Rosneft and Lukoil have been designated under Executive Order 14024 for their roles in Russia’s energy sector. Rosneft is involved in all aspects of oil and gas production, while Lukoil operates both domestically and internationally in oil and gas exploration, production, refining, marketing, and distribution.
Alongside these parent companies, a number of subsidiaries based in Russia have also been sanctioned. The subsidiaries operate across various stages of oil and gas production, refining, exploration, technology development, and field management.
As a result of these sanctions, all property and interests in property of the designated entities within the United States or under U.S. jurisdiction are blocked. U.S. persons are generally prohibited from engaging in transactions involving these entities unless authorized by OFAC. Entities owned 50 percent or more by Rosneft or Lukoil are also subject to these restrictions.
Violations of these sanctions can lead to civil or criminal penalties for both U.S. and foreign individuals or organizations. OFAC enforces sanctions under strict liability, meaning intent is not required for civil penalties. Financial institutions engaging in transactions with designated entities risk exposure to additional sanctions.
Foreign financial institutions facilitating significant transactions or providing services related to Russia’s military-industrial base, including those involving the newly designated entities, may also face sanctions from OFAC. Additional guidance for these institutions is available through updated advisories and frequently asked questions published by OFAC.
OFAC has stated that its sanctions are designed not only to penalize but also to encourage changes in behavior. Entities placed on the Specially Designated Nationals (SDN) List may seek removal by following established procedures with OFAC. Additionally, entities designated under E.O. 14024 may face further export restrictions administered by the Department of Commerce.
Further information about the individuals and entities affected by these sanctions is available through the U.S. Department of the Treasury.
