Sanctions on Russia: US and EU Target Energy Sector in Coordinated Policy Shift
- Oct 23, 2025
- 3 min read
This Article Is Available In
The United States and the European Union have unleashed a coordinated, and for one side, long-awaited new wave of economic restrictions against Russia. The US move marks a "major policy shift" from the previously reluctant Trump administration, targeting Russia's two largest oil companies, Rosneft and Lukoil, for the first time. In parallel, the EU formally adopted its 19th sanctions package, taking aim at the heart of Russia's war economy by targeting its gas sector.
This surprising U-turn from Washington represents a significant win for European allies, who have spent 10 months pleading with the White House to tighten the economic vise on Moscow. Citing growing frustration, President Donald Trump canceled a planned summit with Vladimir Putin in Budapest. "Every time I speak to Vladimir, I have good conversations and then they donât go anywhere," Trump stated, adding it "didnât feel right" to meet. US Treasury Secretary Scott Bessent was more direct: "Now is the time to stop the killing and for an immediate ceasefire."
The EU's move is equally significant. The 19th package introduces the bloc's first-ever ban on imports of Russian liquefied natural gas (LNG), effective January 1, 2027. This provides a crucial legal basis for member states like Belgium, France, and Spain to exit multi-billion-euro long-term contracts. The package also blacklists an additional 117 vessels from the "shadow fleet" used to circumvent the oil price cap and, in a novel move, creates a mechanism to restrict Russian diplomats' travel within the Schengen area, citing their role in spreading "coordinated information manipulation." The combined pressure is designed to cripple Moscow's war machine, but its success hinges on one critical variable: Russia's biggest customers.
The impact was immediate and global. India, the largest buyer of seaborne Russian crude since 2022, announced its refiners are poised to "sharply curtail" imports. This decision is driven by the need to comply with the new US sanctions on Russia, which directly target its key suppliers, Rosneft and Lukoil. The US Treasury has given companies worldwide until November 21 to wind down all transactions with the sanctioned entities.
For India, the decision appears to be twofold. Beyond the logistical nightmare of banks refusing to clear payments for sanctioned entities, the move could unblock a major diplomatic stalemate with Washington. India has been facing punishing 50% tariffs on its exports to the US, partially in retaliation for its Russian oil purchases. This sudden alignment with US policy could remove a major hurdle in negotiating a new trade deal.
The move also ends a lucrative, if not complicated, arrangement. Indian state refiners are now reviewing all trade documents, and a source at one refinery stated, "There will be a massive cut." Reliance Industries, a top private buyer, is reportedly planning to "reduce or halt completely" its Russian imports. This decision was already being considered for its export-focused refineries due to an impending EU ban on refined products made from Russian oil, set to take effect in January.
Global markets, which had grown accustomed to a steady flow of Russian energy despite the war, reacted instantly. Oil prices jumped over 3% on the news, with Brent crude rising to $64.66 a barrel. Analysts note that sanctions are most effective when "coupled with pressure on consumers." Therefore, India's decision to cut imports is seen as "almost as significant" as the new US and EU measures themselves.
Moscow, meanwhile, was caught flat-footed. A "stony silence" emanated from the Kremlin, with pro-Kremlin state media like TASS and RIA Novosti conspicuously ignoring President Trump's critical comments about Putin. Just days earlier, these outlets were bullishly promoting the now-canceled summit.
The few official Russian comments that did emerge were split. Foreign Ministry spokesperson Maria Zakharova called the sanctions "counterproductive" but said contacts could continue. In stark contrast, former President Dmitry Medvedev, a notorious hawk, slammed Trump. He declared the "U.S. is our adversary" and that its "talkative 'peacekeeper' [Trump] has now fully embarked on the warpath against Russia," accusing him of aligning with an "insane Europe."
CRUX
The US and EU have launched their most significant coordinated sanctions on Russia to date, targeting the heart of Moscow's energy revenue: oil and gas. This major policy shift from the Trump administration, coupled with the EU's first-ever LNG ban, has triggered immediate global consequences. India, Russia's top oil customer, is now moving to cut imports, amplifying the economic pressure and signaling a major new phase in the West's effort to force a ceasefire.
Ultimately, the flow of energy is inseparable from the flow of power.
