The White House finally hit the core of Russia’s war economy. U.S. President Donald Trump’s new sanctions on Russian oil giants Rosneft and Lukoil cut directly into the money stream that fuels Moscow’s invasion of Ukraine. The measures do more than freeze assets; the Treasury Department’s designation threatens any bank, shipper, refiner, or trader that does business with those firms or their subsidiaries. In theory, the order makes Russian oil toxic.
That matters. Rosneft and Lukoil anchor Russia’s global oil network. These firms help bankroll everything from Iranian drones to North Korean munitions that feed Moscow’s war machine. Together, they account for roughly half of Russia’s oil exports. By cutting Russia off from dollar clearing—the network that moves global payments through the U.S. financial system—and scaring off banks in India, China, Turkey, and the Gulf, the United States can start to squeeze Russian President Vladimir Putin’s ability to fund a long war. That leverage has weakened as Russia has diversified: Before the invasion, most Russian oil sales cleared in dollars; now, many settle in yuan or rubles. Yet even as Moscow shifts currencies, the system it depends on—freight, insurance, and trade finance—still runs through dollars. Lose access to that, and every transaction slows, costs rise, and profits shrink.
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It took nearly 10 months and a string of diplomatic stunts for the Trump administration to finally hit something that matters. Until now, Trump mostly threatened tariffs and warned partners not to buy Russian oil, then backed down when Putin ignored him. He even tried to barter territory for peace and floated a “summit” in Budapest, hosted by Russia’s most pliant European Union ally, Hungary. Only after that quixotic effort collapsed did Trump finally sign off on serious financial measures, but it’s only a first step. Now comes the part that actually matters: enforcement.
Five key tests to ensure sanctions enforcement
Sanctions only work if treated like a campaign, not a press release. And the United States can’t run that campaign alone. Washington and Brussels, along with key partners around the world need to coordinate—aligning blacklists, closing loopholes, and jointly policing “dark” ship-to-ship transfers. They must keep tightening until Russia’s war economy cracks. For the Trump administration, that means five concrete tests.
1. Hit the ecosystem
The Treasury says U.S. regulators will block any firm or subsidiary in which Rosneft or Lukoil holds a majority stake. That sounds tough but risks missing the larger problem: Russia’s oil export system increasingly relies on opaque intermediaries that obscure ownership, flagging, and routing information across the supply chain. These practices—running sales through offshore trading desks, chartering vessels under Liberian or Panamanian flags of convenience, and moving barrels through complex corporate structures—make it difficult to determine which entities ultimately enable sanctioned transactions. Effective enforcement will require the administration to designate not only primary actors but also intermediaries, refiners, and traders that knowingly facilitate prohibited deals. The test isn’t whether the Treasury enforces the 50 percent rule alone; it’s whether it will name and sanction facilitators who materially support those transactions.
2. Break the shadow fleet
Russia moves sanctioned oil on an aging, uninsured tanker fleet that sails under so-called flags of convenience, does ship-to-ship transfers off the coast of Sicily or the Spanish exclave of Ceuta, lies on customs forms, and then declares the cargo “Kazakh,” “Malaysian,” or “blend” to hide its origin. Europe has complained about this network for years, but policing has been sporadic. The European External Action Service (EEAS) estimates Russia’s shadow fleet numbers between 600 and 1,400 ships—half the country’s seaborne exports. Treat that fleet like contraband, and you start to hit Putin where it hurts.
Europe should adopt a “small-town traffic cop” approach, inspecting every suspect vessel passing through the Danish straits or North Sea for environmental and safety compliance: crew training, insurance, flag validity, and pollution risk. Some ships will pass; others will be detained, seized, or turned back. Every inspection raises costs and uncertainty for Moscow. France has already shown how this works: It arrested a vessel and crew linked to the Copenhagen Airport drone attacks. The United States should back these efforts with intelligence and surveillance—sharing satellite data, tracking suspect tankers, and pressuring insurers and registries that enable them. Washington could even spare a ship or two loitering off Venezuela for the effort.
3. Publish scorecards
Sanctions fail in silence. The administration should release hard numbers every month: how many barrels were blocked, which tankers lost insurance, which registries lost their flags, which banks froze which accounts, and which jurisdictions kept looking away. A public scoreboard scares off violators and proves seriousness to allies—especially in Europe, which has grave doubts about Trump’s consistency after months of flirtation with Putin and talk of “territorial compromise.”
4. Close the India and China loopholes—by action, not talk
The single-biggest question now sits in New Delhi and Beijing. After the Treasury’s announcement, major Chinese and Indian buyers reportedly paused or cut purchases of seaborne Russian crude. That reaction shows fear of secondary sanctions. But fear fades fast without proof. Trump must turn that threat into action—something tangible that shows Washington means business, as it did under the Countering America’s Adversaries Through Sanctions Act (CAATSA) when it sanctioned China for buying the Russian S-400 missile defense system.
Washington also needs to confront a quieter loophole: Indian refiners have become a backdoor for Russian oil. In effect, Russian oil still reaches Western markets, just relabeled as “Indian.” That practice keeps Moscow’s revenue flowing and blunts the impact of sanctions. The Treasury has the tools to close this gap by tightening origin-tracking rules and signaling that refined products made from Russian crude will not remain exempt.
The Treasury Department’s recent move to block Lukoil’s proposed asset sale to the Swiss-based trading firm Gunvor shows what enforcement looks like. By forcing the company to withdraw its bid, Washington demonstrated that it can use licensing power not just to freeze assets but to stop major transactions that would otherwise inject short-term cash into Russian coffers. Moves such as this prove that enforcement can work—if it’s consistent.
5. Stop undermining your own sanctions
With the Trump administration, focus on policy rarely lasts. The same day the Treasury showed it could get tough, the administration sent the opposite signal. President Trump met with Hungarian Prime Minister Viktor Orbán at the White House on November 7 and announced he’d grant Hungary a one-year exception from energy sanctions. That kind of carve-out undermines the credibility of the sanctions package before enforcement begins in earnest.
This is how sanctions quietly collapse. Trump announces them; the Treasury makes an initial enforcement splash; then, the administration grants country-specific carve-outs to shield favored partners. Meanwhile, Putin keeps his money, and the war keeps going. That loop—loud rollout, weak follow-through—would hand Putin exactly what he wants: sanctions that sound historic but work like a managed tax on his war, not a chokehold.
See also
Europe should move in lockstep with the United States
President Trump finally did what Ukraine has asked of Washington since February 2022: He hit Russia’s oil money head-on and threatened anyone who keeps buying it. Europe should move in lockstep with these U.S. sanctions.
First, Europe must stop pretending its exposure ends with oil that carries an official Russian customs label. Ports such as Savona in Italy have faced allegations of laundering Russian crude. A sanctioned Russian firm can load in the Black Sea, transfer its cargo to a flag-of-convenience tanker in the Aegean, blend the oil offshore, and sell it under a false invoice. The EU’s new sanctions package banning Russian liquefied natural gas (LNG) and targeting 557 known shadow vessels are good steps. Now they must be enforced—with real seizures and port denials.
Second, Europe has to pair enforcement with serious financial commitments to Ukraine. Otherwise, Putin will just wait out the squeeze. The frozen Russian assets held in Euroclear—mostly under Belgian jurisdiction—should go toward Ukraine’s air defense, grid repair, and artillery production.
The EU has signaled willingness. Now, it needs to follow through.
A one-two punch of asset seizures and sanctions pressure won’t make Putin back off overnight. But steady financial losses now will shorten his war window, tightening the vise before Russia can reroute trade, rebuild stockpiles, or import new components. That time matters, especially as Kyiv strikes back at Russia’s energy network, hitting refineries, depots, and power plants that bankroll the war.
Conclusion
Sanctions work like blockades. You have to patrol them. You have to intercept. You have to show contraband on the dock. And you have to keep tightening the cordon.
If Trump slides back into summit theatrics with Putin and lets enforcement fade, this moment will turn into one more empty headline.
If Trump slides back into summit theatrics with Putin and lets enforcement fade, this moment will turn into one more empty headline. Putin will adapt, reroute Russian crude through new shells, and keep funding his war. He knows the Trump administration’s weakness: Putin flatters Trump, promises deals, and bets on distraction.
If the administration wants to prove skeptics wrong, it has to enforce these sanctions seriously and without exceptions. Putin still has enough money to fight for another year or two. Every dollar denied now shortens that window and buys Ukraine time to survive. Anything less, and Trump’s sanctions will go down as another showpiece—loud at launch, hollow in practice.