Oil Prices Surge as U.S. Sanctions Hit Russian Giants Rosneft and Lukoil Over Ukraine War

Oil prices jumped more than $1 per barrel on Thursday, extending the previous session’s gains, after the United States imposed fresh sanctions on Russian oil majors Rosneft and Lukoil in response to Moscow’s ongoing war in Ukraine.

Brent crude futures rose $1.76, or 2.81%, reaching $64.35 per barrel by 0041 GMT, while U.S. West Texas Intermediate (WTI) climbed $1.68, or 2.87%, to $60.18. The surge followed Washington’s announcement of measures aimed at cutting off key funding sources for the Kremlin’s war efforts.

“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,” U.S. Treasury Secretary Scott Bessent said. The U.S. also warned that further action could follow unless Moscow agrees to an immediate ceasefire.

The move comes after the United Kingdom sanctioned Rosneft and Lukoil last week, and the European Union approved its 19th sanctions package, which includes a ban on Russian liquefied natural gas (LNG) imports. Meanwhile, the U.S. has urged Japan—one of the major buyers of Russian LNG—to halt its purchases as Washington intensifies global efforts to isolate Russia’s energy sector.

Market analysts say the sanctions have provided short-term support for crude prices, although the reaction has been relatively measured due to past experiences with diluted or delayed sanctions. “While the sanction news has buoyed crude oil prices, the rise has been modest given the challenges in enforcing such measures,” noted Tony Sycamore of IG.

Both Brent and WTI futures spiked by more than $2 per barrel immediately following the sanctions announcement, fueled further by signs of growing U.S. energy demand, according to data from the Energy Information Administration (EIA).