Since the beginning of the Ukrainian war, the West has intensified its sanctions on Russia in the hope of breaking the Russian economy and ending the war. China, however, has served as a disruptive force keeping the Russian economy afloat.
The new wave of sanctions imposed by President Trump are expected to take a significant bite out of Russia’s income, and China, whose economy is already struggling and would be made worse by secondary sanctions, is already backing down from buying Russian oil.
This doesn’t mean the Russian economy is about to collapse nor that it will soon be unable to wage war; however, it will definitely slow Russia down and hopefully put Vladimir Putin in a weaker position at the negotiation table.
Trump imposed these sanctions due to growing frustration with Putin’s lack of progress in peace negotiations to end the Ukraine war. Behind the scenes, Trump’s frustration reached new heights after Secretary of State Marco Rubio had an unproductive call with Russian Foreign Minister Sergei Lavrov, which concluded that Russia was not in a position to reach a deal to end the war.
Trump stated he canceled a planned meeting with Putin in Budapest because talks “don’t go anywhere” and it “didn’t feel right” to meet when they weren’t going to reach an agreement. U.S. Treasury Secretary Scott Bessent said the goal is to pressure Vladimir Putin to accept President Trump’s proposal for an immediate ceasefire.
This new round of U.S. and European Union sanctions are targeting Russia’s major oil companies, Rosneft and Lukoil, along with dozens of their subsidiaries. Together, these two companies export 3.1 million barrels of oil per day, representing 70 percent of Russia’s overseas crude oil sales. Rosneft alone is responsible for nearly half of Russia’s oil production, which accounts for 6 percent of global output.
All property and interests of the designated companies in the U.S. will be frozen and U.S. entities will be prohibited from doing business with them. The sanctions, which take effect November 21, give traders a 30-day grace period to wind down business with Rosneft and Lukoil.
The European Union is also moving to phase out Russian liquefied natural gas shipments by the end of next year, crack down on cryptocurrency platforms used to evade financial restrictions, and has sanctioned 117 more tankers in Russia’s “shadow fleet,” bringing the total to 557.
Two of Russia’s largest oil companies, Rosneft and Lukoil have already been hit by rolling European sanctions and reduced oil prices. In September, Rosneft reported a 68 percent year-on-year drop in net income for the first half of 2025, while Lukoil posted an almost 27 percent fall in profits for 2024. Economists estimate Russia has lost about $100 billion in oil and gas revenue since the war began, though it still earned $154 billion in oil exports in 2025.
Four major Chinese state-owned oil companies – PetroChina, Sinopec, CNOOC, and Zhenhua Oil – have temporarily suspended their purchases of seaborne Russian oil following the new U.S. sanctions on Rosneft and Lukoil. The move comes just as Indian refiners, previously the biggest buyers of Russian seaborne crude, are also cutting imports to comply with the sanctions. Several senior refinery executives in India indicated the restrictions would make it impossible for oil purchases to continue.
China is a key strategic partner of Russia and Beijing’s large-scale oil purchases have aided Moscow through punishing Western sanctions. China imports approximately 1.4 million barrels of Russian oil per day by sea, though most volumes are purchased by independent refiners rather than state-owned companies.
Estimates for state-owned company purchases vary. Vortexa Analytics places it under 250,000 barrels per day for the first nine months of 2025, while Energy Aspects estimates around 500,000 barrels per day. Most Chinese state refiners are pausing purchases out of concern over secondary sanctions, though smaller independent “teapot” refiners may continue limited imports.
However, China also imports about 900,000 barrels of Russian oil per day by pipeline, all handled by PetroChina, which is unlikely to be affected by the sanctions because these deliveries bypass seaborne trade routes and shadow-fleet shipping.
Chinese Foreign Ministry spokesman Guo Jiakun criticized the U.S. sanctions, stating they lack a basis in international law or United Nations Security Council authorization. Chinese and Indian buyers of Russian oil were notably absent from the U.S. sanctions list, indicating Trump is trying to pressure these buyers to voluntarily reduce purchases rather than directly sanctioning them at this stage.
Trump said he would raise concerns about China’s purchases of Russian oil during his meeting with President Xi Jinping at the 2025 APEC summit in South Korea next week, noting that China, as a major buyer of Russian oil, could “influence” Russia’s decisions regarding Ukraine.
Putin downplayed the sanctions’ impact, stating they could lead to “a sharp increase” in gas prices worldwide and questioned whom Trump’s advisors were “really serving” by recommending such measures. In a televised speech, Putin said the U.S. sanctions on Russian oil will have little impact on his country’s economy and that oil prices have risen as a result – something he claimed to have warned Trump about.
Putin called the sanctions an “unfriendly act” and shows no sign of agreeing to a ceasefire. Putin also said he understood the U.S. wished to “cancel or postpone” the Budapest summit, adding that “for both me and the U.S. president, it would be a mistake to approach this lightly and then walk away without the expected result.”
Dmitry Medvedev, deputy chairman of Russia’s Security Council, was more aggressive, stating “The USA is our adversary, and their loquacious ‘peacemaker’” (referring to Trump) “has now fully taken up the path of war with Russia.” Maria Zakharova, Russia’s foreign ministry spokesperson, said the ministry was ready to “continue contacts” with the U.S. State Department but noted Russia’s goals in Ukraine “remain unchanged” and called the sanctions counterproductive to finding a peaceful solution.
The suspension of purchases by China and India marks a major blow to Russia, as these are its two largest oil customers, accounting for most of its seaborne exports. Analysts expect the sudden drop in demand to strain Russia’s oil revenues, though experts note these sanctions will hurt Russia but probably not enough to stop the Ukraine war completely, as Russia will continue selling oil and there are always buyers willing to take the risk to beat sanctions.
