Russia’s financial markets have entered another turbulent phase after the White House rolled out a new wave of sanctions targeting Moscow’s two biggest oil giants Rosneft and Lukoil.
The move, announced last week, has sent shockwaves through the Kremlin. The sanctions freeze both companies’ assets in the United States and bar American firms or individuals from doing business with them. In addition, Washington has warned of secondary sanctions against any foreign financial institutions that continue to deal with these Russian energy firms.
This latest pressure campaign is seen as one of the most severe steps taken yet to cut off the Kremlin’s war funding. Oil and gas revenue remains a lifeline for Moscow, making up almost a quarter of Russia’s national budget and serving as the main source of cash for its ongoing war in Ukraine.
Economic Fallout and Market Panic
The fallout was immediate. Russian energy markets plunged sharply, with Rosneft and Lukoil stocks leading the decline. Rosneft shares dropped 5.6% to their lowest level since March 2023, while Lukoil fell 6.5%, after having already lost over 12% the previous week.
Together, the two companies have lost more than 900 billion rubles (approximately £8.5 billion) in market value since the sanctions were announced.
According to financial experts, the mood in Moscow’s investment circles has turned grim. Economist Yevgeny Kogan summed it up bluntly:
“There’s no light at the end of the tunnel. The peacemakers have achieved nothing, and the situation is close to a dead end.”
Desperate Diplomatic Moves
In what analysts describe as a sign of desperation, the Kremlin sent its economic envoy Kirill Dmitriev to Washington to plead with the Trump administration for relief. However, reports suggest his visit ended without any progress, leaving Moscow in deeper financial uncertainty.
The Bigger Picture
The sanctions are already having ripple effects across Asia. Energy firms in China and India, two of Russia’s biggest oil buyers, have temporarily paused purchases to assess the risks of secondary sanctions. If those markets continue to hesitate, Russia’s oil-dependent economy could face one of its most serious crises since 2022.
For now, all eyes are on how the Kremlin will respond whether through diplomatic overtures, economic countermeasures, or a renewed push to find alternative trade routes. But one thing is clear: Washington’s latest move has struck directly at the heart of Moscow’s financial stability.
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