US sanctions cut Russia’s oil revenue as prices fall: Treasury

The US Treasury has said that recently imposed sanctions on Russian oil giants Rosneft and Lukoil are already impacting Moscow’s energy revenues, with early indicators showing reduced prices and shrinking sales volumes. According to Washington, the measures are weakening Russia’s ability to financially sustain its war in Ukraine.

The sanctions — announced on October 22 — are the strongest steps taken by the US since Russia’s 2022 invasion of Ukraine and mark President Donald Trump’s first direct sanctions against Moscow since returning to office. Companies worldwide have been given until November 21 to wind down all dealings with Rosneft and Lukoil or risk being cut off from the US dollar financial network.

US Treasury: Russian Revenues Are Falling

The Treasury’s Office of Foreign Assets Control (OFAC) said its early market assessment shows the sanctions are meeting their objective by lowering the sale price of Russian crude. This, officials said, is restricting the Kremlin’s funding capabilities.

The OFAC report noted that several Russian crude grades have dropped to multi-year lows. Nearly a dozen major refiners in India and China — the top two buyers of Russian oil — have already indicated they will pause purchases for December shipments.

Russian Oil Selling at Steep Discounts

Data from LSEG Workspace revealed that Russia’s benchmark Urals crude loaded at the Novorossiysk port was trading at $45.35 per barrel on November 12, the lowest since March 2023. Prices improved slightly to $47.01 on Monday after loadings resumed following a Ukrainian drone and missile attack.

By comparison, Brent crude futures were at $62.71 on November 12 and $64.03 on Monday.

Earlier reports indicate that Russian crude discounts have widened significantly as Indian and Chinese refiners reduced their intake in response to US sanctions.

Uncertainty Over Enforcement

While the sanctions threaten to sever violators from the dollar system, Washington has not yet clarified how enforcement will work, especially since China and India — both key Russian oil customers — are not aligned with US sanctions policy.

US Warns It Is Ready for More Actions

A US Treasury spokesperson said the measures are “starving Putin’s war machine” and added that Washington is prepared to intensify actions if needed to stop Russia’s aggression.