The Trump administration applied sanctions on Russian oil companies Lukoil and Rosneft amid growing frustration over Moscow’s actions in Ukraine.
The measures mark the first time President Trump has imposed sanctions on Russia during his second term and represent a ratcheting up of the tension between Washington and Moscow.
The move comes just after the European Union approved a 19th package of sanctions on Moscow on Wednesday, which includes a ban on Russian liquefied natural gas imports. Last week, the United Kingdom similarly sanctioned Rosneft and Lukoil.
The U.S. Treasury Department said further action could follow if Russia does not immediately agree to a ceasefire in its ongoing war in Eastern Europe.
“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 Secretary Scott Bessent said in a statement, per Reuters. “We encourage our allies to join us in and adhere to these sanctions.”
Last week, the Treasury Secretary met with Canadian Finance Minister Francois-Philippe Champagne, with part of the discussion focused on coordinating pressure on Russia.
News of the sanctions pushed oil prices up by more than $2 a barrel.
The direct targeting of Russian oil firms represents a significant policy shift for the current U.S. administration. Earlier this year, Trump imposed additional 25% tariffs on goods from India in response to India’s purchase of discounted Russian oil.
On Wednesday, Trump told reporters in the Oval Office that he canceled a planned summit with Putin in Hungary, stating he did not feel it was an appropriate time for the meeting.
Trump also stressed that he hopes the recently imposed sanctions will be temporary, as the policy could threaten the dominance of the U.S. dollar in global transactions.