Oil Surges to $64 After U.S. Sanctions Rosneft and Lukoil

Oil prices surged after the U.S. imposed new sanctions on Russia’s top oil firms, Lukoil and Rosneft, to pressure Moscow over the war in Ukraine, with Brent crude rising $3.03 (4.9%) to $64.35 and WTI gaining $1.42 (2.4%) to $59.92. Treasury Secretary Scott Bessent said the sanctions target companies “funding the Kremlin’s war machine.” Prices were also supported by stronger U.S. demand, as crude inventories fell by 961,000 barrels to 422.8 million, defying expectations for a build. Analysts noted that total U.S. oil demand surpassed 20 million bpd, signaling robust consumption during the typically soft shoulder season. Geopolitical factors, including Trump’s comments that India will limit Russian oil imports and progress in U.S.-China trade talks, further boosted market optimism.

___________________________________

U.S. Sanctions Rosneft and Lukoil in Trump’s First Direct Action Over Ukraine War

The U.S. imposed full sanctions on Russia’s top oil producers, Rosneft and Lukoil, in an effort to push President Vladimir Putin toward ending the war in Ukraine, marking a major policy shift by President Donald Trump after months of restraint. The Treasury cited Russia’s lack of commitment to peace, while Trump said the move was “time,” expressing hope it would be temporary as oil prices jumped 5% on fears of supply disruption. Rosneft and Lukoil together account for nearly half of Russia’s crude exports, critical to the nation’s budget, making the sanctions a significant economic blow. Analysts doubt the move will alter Putin’s strategy, noting Moscow’s resilience in circumventing prior sanctions, while Ukraine praised the action as a sign of renewed U.S. resolve. The UK has already sanctioned the same firms, and the EU is preparing a new package including an LNG import ban to tighten pressure on Moscow.

___________________________________

Trump Plans Talks With Xi on Russian Oil Purchases and Broader U.S.-China Deals

Trump said he plans to discuss China’s purchases of Russian oil with Xi Jinping during their upcoming meeting in South Korea, framing it as part of efforts to end the Russia-Ukraine war. He expressed confidence that Xi could exert significant influence over Russian President Vladimir Putin and described the Chinese leader as receptive. The announcement follows Trump’s decision to cancel a planned meeting with Putin and impose new sanctions on Russian energy companies. In addition to Russian oil, Trump said talks with Xi would cover rare earth exports, U.S. soybean sales, and nuclear stockpile reductions. He expressed optimism that the discussions could yield agreements across multiple areas of U.S.-China engagement.

___________________________________

EU Targets Chinese Refineries in 19th Russia Sanctions Package

The EU’s 19th sanctions package against Russia will target four Chinese-linked companies, including two independent refineries, a trading firm, and another entity mostly outside oil, for circumventing Western restrictions. The move marks the EU’s toughest action yet on Beijing, which it sees as central to Russia’s sanctions-evasion network, though China maintains it conducts only “normal trade.” The package also includes a ban on Russian LNG from January 2027, measures against the shadow tanker fleet, Russia’s military-industrial complex, and diplomatic movements. The sanctions have been approved by member states but await formal adoption, delayed by Slovakia’s unrelated reservations, and are expected before the week’s end. The EU aims to further cut Russia’s war funding in coordination with G7 nations, following similar measures by the UK against Russian and Chinese oil-linked entities.

___________________________________

IMO Delay Boosts LNG Adoption as Maritime Fuel

The delay of the IMO’s net-zero strategy is expected to boost LNG adoption as a maritime fuel, according to Lloyd’s Register. LNG has become the preferred dual-fuel option for shipowners, with 121 vessels ordered over the past year, compared with far fewer for methanol and ammonia. Its existing technology, infrastructure, and fuel volumes make it attractive, despite limited greenhouse gas reduction potential and risk of stranded assets. The postponement of the IMO carbon-pricing programme removes pressure on LNG operators, a move welcomed by Greek owners who have heavily invested in LNG. Analysts note that a finalized IMO Net-Zero Framework would have encouraged alternative fuels like ammonia, but the current uncertainty favors LNG in the near term.