The United States has imposed full blocking sanctions on Rosneft and Lukoil, Russia’s largest oil companies, along with a sweeping network of subsidiaries, marking the most expansive U.S. action to date targeting Russia’s energy sector.
The designations were issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) under Executive Order 14024 due to the firms’ continued operation in Russia’s energy economy.
Rosneft and Lukoil, previously subject to limited financing and technology restrictions, are now fully blocked. OFAC also designated dozens of subsidiaries engaged in oil and gas exploration, production, transport, and refining. Under OFAC’s “50 percent rule,” any entity owned 50 percent or more by the designated companies is automatically blocked, regardless of whether it is individually listed.
All property and interests in property of the designated entities located in the United States or controlled by U.S. persons must be frozen. U.S. persons are prohibited from conducting any transactions with the companies unless authorized by a license.
The sanctions extend beyond U.S. jurisdiction through the application of secondary sanctions, exposing non-U.S. financial institutions and companies to penalties if they conduct significant transactions with Rosneft, Lukoil, or other designated Russian energy entities. The measures are reinforced by new export controls from the U.S. Commerce Department’s Bureau of Industry and Security (BIS), applying to U.S.-origin goods, software, and technology, as well as certain foreign-produced items derived from U.S. inputs.
According to Anthony Rapa of Blank Rome, the action represents “full-on, real-deal, asset-freeze sanctions,” and is expected to put pressure on major Russian oil importers including China, India, and Turkey. The prospect of secondary sanctions is expected to trigger an accelerated wind-down of exposure by global commodity traders and financial institutions.
Despite the broad scope of U.S. measures, key allies have moved to secure exemptions to maintain domestic energy security. According to news reports, the German federal government obtained an open-ended “letter of comfort” from the U.S. administration exempting Rosneft Deutschland GmbH and RN Refining & Marketing GmbH from U.S. sanctions. These entities were placed under German state trusteeship in 2022 and are considered operationally decoupled from their Russian parent.
The United Kingdom issued General License INT/2025/7598960 authorizing dealings with the same German subsidiaries through October 22, 2027.
European Union: Rosneft remains subject to sectoral restrictions limiting financing and technology transfers, but the EU has not imposed full blocking sanctions on Rosneft as an entity. Lukoil continues limited downstream operations in EU member states under existing rules banning seaborne Russian crude imports.
China: China’s state-owned oil companies have reportedly paused direct purchases of Russian crude transported by sea while assessing exposure to U.S. secondary sanctions. Chinese authorities have objected to the U.S. measures, characterizing them as unilateral and not approved by the UN Security Council.
The U.S. Treasury stated that the sanctions are intended to increase pressure on Moscow to agree to a ceasefire in Ukraine. Treasury Secretary Scott Bessent said the United States is prepared to take further measures and called on U.S. partners to align with the sanctions.
The sanctions take full effect on November 21. Their impact will depend on enforcement and on the decisions of major crude importers. OFAC has published an annex listing all designated subsidiaries. Entities may petition for delisting through OFAC’s administrative process.
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