The sanctions imposed by the Trump administration against the Russian energy sector are beginning to have concrete effects, directly impacting the Kremlin’s finances. The Russian oil giant Lukoil has agreed to sell its assets outside Russia to an American investment firm in a transaction valued at approximately $22 billion.
The decision comes after the imposition of American „blocking” sanctions, which froze assets in the US or under American control and forced divestment from the respective investments, as shown in an analysis by Newsweek.
Why Lukoil is a key target
Lukoil is the largest non-state company in Russia in terms of revenue and has stood out for decades with an extensive international presence. Unlike state-controlled giants like Rosneft, Lukoil has heavily invested outside Russia, with refineries in Europe, production assets in the Middle East, and gas stations on multiple continents.
In the United States, the company owns approximately 200 fuel stations, particularly in New Jersey, New York, and Pennsylvania. This external expansion has brought stable revenues to Russia over the years in the form of dividends and taxes, providing Moscow with an economic influence tool beyond its borders.
Expanded sanctions, real impact
The Trump administration imposed the sanctions in October 2025 in an effort to increase financial pressure on Moscow due to the war in Ukraine. The United Kingdom quickly followed suit, introducing similar restrictions targeting dozens of tankers from the so-called "phantom fleet" used to bypass export limits on oil.
The American measures have "blocked" all Lukoil properties and interests in the US or under American control, including assets of subsidiaries and affiliated entities. Essentially, these have been frozen and can no longer be used or transferred.
US Treasury Secretary Scott Bessent described Lukoil as part of the "Kremlin's war machine" and added, "Now is the time to stop the killings and have an immediate ceasefire."
"I felt the time had come"
Asked about the decision to impose sanctions, President Donald Trump, previously criticized for wavering positions on Russia, explained, "I just felt the time had come. I've been waiting a long time. I thought we would go much further in the Middle East."
In turn, the Treasury Department stated that these measures "increase pressure on Russia's energy sector and weaken the Kremlin's ability to generate revenue for its war machine and support its weakened economy."
Moscow's reaction was swift. Dmitry Medvedev, a close ally of Vladimir Putin, wrote on X that "the decisions made represent an act of war against Russia" and that "Trump is now fully in line with crazy Europe."
A heavy blow to Russia's budget
The sale of Lukoil's foreign assets significantly reduces the Russian state's sources of income at a highly sensitive time. The company's international operations brought steady profits that returned to Russia through dividends and corporate taxes. Losing these limits Moscow's ability to earn revenues from outside its borders.
According to Reuters, the Russian federal budget's revenues from oil and gas taxes are expected to drop by 46% this month compared to January last year, to around 420 billion rubles ($5.41 billion), the lowest level since August 2020.
Considering that about a third of Russia's budget revenues come from the energy sector and war expenses have surged, the sanctions affect not only the current military effort but also the Kremlin's long-term financial options.
Economic pressure and stalled negotiations
Simultaneously, the Trump administration is trying to revive negotiations to end the war in Ukraine. American and European officials speak of a certain diplomatic impetus, but with no progress on the central issue: the future of Ukrainian territories occupied by Russia.
Analysts believe that Putin has no real incentive to make concessions, counting on eroding Western unity and reducing military support for Kiev.
Ukrainian President Volodymyr Zelensky stated that the next round of talks between the US and Russia is tentatively scheduled for February 1 and called for advancing the meeting. He reiterated calls for tougher sanctions, arguing that only additional economic pressure can force the Kremlin to accept real concessions – and the Lukoil case seems to support his position.