Oil prices surged by nearly 3% on Wednesday evening after the Trump administration announced fresh sanctions on Russia’s two largest oil companies. The move targets Moscow’s financial capacity amid its ongoing conflict in Ukraine, citing a failure to engage earnestly in peace talks.
By late trading, Brent crude futures increased by $1.83, or 2.9%, to reach $64.42 per barrel, while West Texas Intermediate (WTI) crude rose $1.74, or 3%, to $60.24 per barrel. Earlier in the session, Brent had closed 2% higher at $62.59, and U.S. crude settled up 2.2% at $58.50.
Treasury Secretary Scott Bessent emphasised the urgent need for “an immediate ceasefire” as he unveiled sanctions on Rosneft and Lukoil, key pillars of Russia’s oil industry. He added, “Treasury is prepared to take further action if necessary to support President Trump’s effort to end yet another war,” urging allied nations to uphold the sanctions for maximum effect.
The Treasury Department highlighted that these measures aim to impede the Kremlin’s ability to finance its military operations by constricting essential revenue sources. The sanctions come amid reports that a scheduled meeting between President Donald Trump and Russian President Vladimir Putin in Budapest was cancelled, as disclosed by a senior White House official.
Additionally, the U.S. administration is pressing India—one of the largest importers of Russian crude—to halt its purchases in response to escalating geopolitical tensions.
This year, U.S. crude oil has declined by 16%, with Brent crude down nearly 14%, largely due to increased production by OPEC+ members, including Saudi Arabia and Russia. Compounding these pressures, ongoing trade tensions related to Trump’s tariff policies have sparked concerns about slower global economic growth, which could suppress oil demand.
Market experts warn that the new sanctions may further disrupt supply chains, intensifying volatility in an already fluctuating market affected by geopolitical shifts and evolving demand patterns.
The full impact will depend on whether major economies implement these sanctions effectively and reduce their reliance on Russian crude exports, a critical factor in maintaining market balance.