US announces sanctions on Russia's two biggest oil producers in bid for Ukraine talks

The Trump administration has announced sanctions on two of Russia's biggest oil producers on Wednesday, after resistance for months, as part of a push to get Russian President Vladimir Putin to end the war in Ukraine, which has now entered its fourth year.

Rosneft PJSC and Lukoil PJSC have been blacklisted by the US Treasury Department due to “Russia’s lack of serious commitment to a peace process to end the war in Ukraine,” as per an official White House statement.

Both these companies jointly account for nearly half of Russia's crude oil exports, as per Bloomberg estimates. The industry in itself, accounts for around a quarter of the country's budget.

“I just felt it was time,” Trump said in a meeting with NATO Secretary General Mark Rutte in the Oval Office. He said he hoped “they won’t be on for long” and he hoped the war would be settled.

US entities and individuals are prohibited from doing business with entities that are sanctioned / blacklisted by the Treasury Department. Rosneft is run by Putin's close ally Igor Sechin, while Lukoil is privately held.

The sanctions mark another U-turn from the Trump administration, which, until now, had refused such moves hoping that a deal would be reached to mark the end of the war. Trump, during his Presidential campaign, had famously claimed that he will end the Ukraine war in the first day of taking office.

Trump has also put off his planned summit with Putin, which was scheduled to be held in Hungary's Budapest. "The only thing I can say is, every time I speak with Vladimir, I have good conversations, and then they just don’t go anywhere," Trump said. He said a meeting with the Russian leader will take place in the future.

The US President had earlier given a 10-day deadline to Russia in July, but proceeded to take no further action once the deadline lapsed. He met Putin in Alaska in a summit that yielded no result. The decision was also being considered by former President Joe Biden during the final days of his presidency but he refrained from taking action over fears of spooking global energy markets.

As a result of this move, Brent Crude futures have seen a jump of 5% overnight, while West Texas futures rose 2.5% to head back towards $60 per barrel after the recent fall.

(With Inputs From Agencies.)