The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced new sanctions targeting Russia’s two largest oil companies, Open Joint Stock Company Rosneft Oil Company (Rosneft) and Lukoil OAO (Lukoil), in response to what the department describes as Russia’s lack of commitment to ending the war in Ukraine. The sanctions are intended to increase economic pressure on Russia’s energy sector and limit the Kremlin’s ability to generate revenue for its military operations.
“Now is the time to stop the killing and for an immediate ceasefire,” said Secretary of the Treasury Scott Bessent. “Given President Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine. Treasury is prepared to take further action if necessary to support President Trump’s effort to end yet another war. We encourage our allies to join us in and adhere to these sanctions.”
Rosneft, a vertically integrated energy company, is involved in exploration, extraction, production, refining, transport, and sale of petroleum and natural gas. Lukoil operates in exploration, production, refining, marketing, and distribution of oil and gas both within Russia and internationally.
The designations are made under Executive Order 14024 for operating in the energy sector of the Russian Federation economy. OFAC is also sanctioning several subsidiaries of both companies, including entities engaged in oil and gas production, refining, and technological development across Russia.
All property and interests in property of the designated or blocked persons that are located in the United States or controlled by U.S. persons are now blocked and must be reported to OFAC. Entities owned 50 percent or more by one or more blocked persons are also subject to these restrictions. U.S. persons are generally prohibited from conducting transactions involving the property or interests of blocked persons unless authorized by OFAC.
Violations of these sanctions may result in civil or criminal penalties for both U.S. and foreign individuals or entities. OFAC can impose penalties on a strict liability basis for violations, regardless of intent. Financial institutions and other parties engaging with designated entities risk further exposure to sanctions.
Foreign financial institutions that conduct significant transactions with Russia’s military-industrial base, including those designated under E.O. 14024, may also face sanctions from OFAC. Updated guidance for foreign financial institutions is available through OFAC’s published advisories and FAQs.
Engaging in certain transactions with designated persons could also lead to secondary sanctions on foreign financial institutions, including restrictions on maintaining correspondent or payable-through accounts in the United States.
OFAC notes that its sanctions aim to bring about a change in behavior rather than punishment. Individuals or entities seeking removal from the Specially Designated Nationals (SDN) List can refer to OFAC’s published guidance on the process for submitting a petition for removal.
Entities added to the SDN List under E.O. 14024 may also be subject to additional export restrictions administered by the Department of Commerce’s Bureau of Industry and Security.
For further information on those sanctioned, OFAC has provided identifying details on its website.
