Sanctions tighten: US targets the financial lifelines of Russian oil exports

The US has taken its most aggressive step yet against Russia’s oil sector, sanctioning the financial arms of Rosneft and Lukoil, companies that together account for nearly half of Russia’s seaborne crude exports. The move immediately pushed Brent prices up by $3 per barrel, though this reaction is unlikely to last as the global market remains well supplied and history suggests sanctions will be learned and evaded over time. The impact, instead, will fall mainly on Russian revenues rather than global oil supply.

Financial sanctions are unlikely to cause significant physical disruption

Rosneft’s trading arm alone handles around 2 million barrels per day (mbpd) of crude exports, while Lukoil adds another 0.8–1 mbpd. By targeting the financial infrastructure behind these flows, Washington is warning international banks against facilitating payments linked to Russian crude, a shift that increases compliance risks but stops short of directly curbing physical trade.

Short term friction may arise, but the market has been adjusting with improved evasion tactics

Unlike earlier sanctions focused on shipping and insurance, these measures heighten risk for the financial sector. Refiners in Asia, notably India’s Reliance Industries, are reassessing exposure, while banks tread carefully to avoid secondary sanctions. Still, Russia’s extensive “shadow fleet,” non-Western insurers, and alternative payment systems mean export volumes are unlikely to drop significantly.

The result will likely be pricing friction, not physical disruption. Russian exporters will have to offer deeper discounts to offset higher legal and logistical risk, eroding net revenues. Over time, those discounts typically narrow again as markets adjust to new compliance rules, a pattern seen after previous rounds of sanctions.

Fig 1. Improvements in evasion have been blunting the impact of new sanctions

Pressure play unlikely to result in lasting price shock

For now, the sanctions signal a political and financial escalation rather than a shift in oil fundamentals. A temporary “sanctions premium” may persist as traders gauge compliance risk, but with the market still moving into surplus, we expect any price strength to fade. Brent is likely to close the year around $65 per barrel, consistent with our baseline forecast.

The message from Washington is clear: the US is tightening economic pressure on the Kremlin at a moment when it can do so without triggering an inflationary oil shock. A reminder that, for now, geopolitics remains a secondary force to supply-demand dynamics in global energy markets. We discuss these impacts and more in our latest commodity price forecasts.