Published by Global Banking & Finance Review®
Posted on October 22, 2025
4 min readLast updated: January 21, 2026
Add as preferred source on GoogleOil prices surged 5% after US sanctions on Russian firms Rosneft and Lukoil, impacting global markets and prompting reactions from OPEC.
By Scott DiSavino
NEW YORK (Reuters) -Oil prices surged around 5% to a two-week high on Thursday after the U.S. imposed sanctions on major Russian suppliers Rosneft and Lukoil over Russia's war in Ukraine.
The sanctions could reduce global oil supplies since Russia was the world's second-biggest crude producer in 2024 after the U.S., according to U.S. energy data.
Brent futures were up $3.37, or 5.4%, to $65.96 a barrel by 12:13 p.m. EDT (1613 GMT), while U.S. West Texas Intermediate (WTI) crude rose $3.33, or 5.7%, to $61.83.
That put both crude benchmarks on track for their biggest daily percentage gains since mid-June and their highest closes since October 8.
"The announcement of sanctions by the U.S. on Rosneft and Lukoil is a major escalation in the targeting of Russia’s energy sector and could be a big enough shock to flip the global oil market into a deficit next year," said David Oxley, chief climate and commodities economist at Capital Economics.
In addition to soaring crude prices, U.S. diesel futures jumped almost 7%, boosting the diesel crack spread to its highest since February 2024. Crack spreads measure refining profit margins.
The U.S. sanctions mean refineries in China and India, major buyers of Russian oil, will need to seek alternative suppliers to avoid exclusion from the Western banking system, said Saxo Bank analyst Ole Hansen.
Multiple trade sources told Reuters that Chinese state oil majors have suspended purchases of seaborne Russian oil from the two companies now under U.S. sanctions, providing a further boost to prices.
Kuwait's oil minister said that the Organization of the Petroleum Exporting Countries would be ready to offset any shortage in the market by rolling back output cuts.
Russian President Vladimir Putin, however, said it will take time for the global market to replace Russian oil. He added that the new U.S. sanctions are an attempt to put pressure on Russia, and that no self-respecting country ever does anything under pressure.
The U.S. said it was prepared to take further action as it called on Moscow to agree immediately to a ceasefire in Ukraine.
"The various U.S. and EU sanctions thus far have had essentially no effect on Russia’s ability to export oil, so we doubt that this latest round will be game-changing. That said, the Kremlin may need to use more intricate methods to ship its oil covertly, thereby increasing costs," said Pavel Molchanov, investment strategy analyst at Raymond James.
Molchanov noted the U.S. investment bank would "continue keeping an eye on this issue" since Russian exports account for about 7% of global oil supply.
MORE SANCTIONS
Britain sanctioned Rosneft and Lukoil last week and the European Union has approved a 19th package of sanctions against Russia that includes a ban on imports of Russian liquefied natural gas.
The EU also added two Chinese refiners with combined capacity of 600,000 barrels per day (bpd), as well as Chinaoil Hong Kong, a trading arm of PetroChina, to its Russia sanctions list, its Official Journal showed on Thursday.
The impact of sanctions on oil markets will depend on how India reacts and whether Russia finds alternative buyers, said UBS analyst Giovanni Staunovo.
Refiners in India, which became the largest buyer of discounted seaborne Russian crude in the aftermath of the war in Ukraine, were poised to sharply curtail imports of Russian oil to comply with new U.S. sanctions on Lukoil and Rosneft, industry sources said on Thursday, potentially removing a major hurdle to a trade deal with the U.S.
Privately owned Reliance Industries, the top Indian buyer of Russian crude, plans to reduce or halt such imports completely, according to two sources familiar with the matter.
(Reporting by Scott DiSavino in New York and Enes Tunagur in London, Katya Golubkova in Tokyo, additional reporting by Seher Dareen in London; Editing by Marguerita Choy and Elaine Hardcastle)
A sanction is a penalty or restriction imposed by one country on another, often to influence behavior or policy. In this context, the U.S. imposed sanctions on Russian firms to impact their oil supply.
Diesel futures are contracts to buy or sell diesel fuel at a predetermined price on a specified future date. They are used by traders to hedge against price fluctuations in the diesel market.
OPEC, the Organization of the Petroleum Exporting Countries, is a group of oil-producing nations that coordinates policies to manage oil production and prices globally.
Brent crude oil is a major trading classification of crude oil originating from the North Sea. It serves as a global benchmark for oil prices.
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