WASHINGTON — The United States has imposed sweeping new sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, in a move that threatens to disrupt the energy supplies of China and India, Moscow’s biggest customers. The measures, announced Wednesday by the U.S. Treasury, are designed to choke off revenue streams that Washington says are fueling Russia’s war in Ukraine. But the ripple effects are already being felt across Asia, where refiners in Beijing and New Delhi are scrambling to assess the fallout.
The sanctions mark one of the most aggressive steps yet by President Donald Trump’s administration to pressure Moscow. They prohibit Western companies and financial institutions from doing business with Rosneft and Lukoil, effectively cutting the firms off from global banking and shipping networks. While the sanctions do not explicitly ban third countries from buying Russian crude, they raise the risk of secondary penalties for entities that continue to trade with the blacklisted companies.
For China and India, which together account for more than 40 percent of Russia’s seaborne crude exports, the implications are profound. Both nations have relied heavily on discounted Russian oil since the invasion of Ukraine in 2022, using it to cushion their economies against global price shocks. Now, with Washington tightening the screws, that bargain is in jeopardy.
India’s Refiners Brace for Disruption
In India, the world’s third‑largest oil importer, the sanctions have triggered immediate concern. Reliance Industries, the country’s largest private refiner, and state‑owned companies such as Indian Oil Corporation have been among the biggest buyers of Russian crude. Industry executives told local media that the new restrictions would make it “all but impossible” to continue purchases at previous levels, given the reliance on Western insurers, shippers, and banks to facilitate transactions.
According to Bloomberg data cited by Indian outlets, Russian oil accounted for nearly 35 percent of India’s imports in the first nine months of 2025. That share could now fall sharply, with some analysts predicting a drop to near zero if refiners cannot find workarounds. The loss of cheap Russian barrels would force India to turn back to Middle Eastern suppliers such as Saudi Arabia and Iraq, as well as to the United States. But those alternatives come at higher prices, threatening to push up fuel costs for consumers and squeeze refining margins.
Prime Minister Narendra Modi’s government has so far avoided direct criticism of the U.S. move, but officials privately acknowledge the challenge. “We have to balance our strategic partnership with the United States with our energy security needs,” one senior Indian diplomat said. “It will not be easy.”
Trump, for his part, suggested that Modi had assured him India would reduce Russian imports by as much as 40 percent by year’s end. That claim has not been confirmed by New Delhi, but it underscores the pressure India faces as it seeks to preserve its ties with both Washington and Moscow.
China’s Oil Industry Feels the Shock
China, the world’s largest crude importer, is also reeling from the sanctions. Roughly 20 percent of its oil imports — about two million barrels per day — have come from Russia this year, making Moscow one of Beijing’s top suppliers. Both state‑owned giants like Sinopec and private “teapot” refiners in Shandong province have leaned heavily on Russian barrels, which were sold at steep discounts compared to Middle Eastern grades.
The U.S. sanctions now complicate those flows. Chinese refiners risk losing access to Western shipping and insurance if they continue dealing with Rosneft and Lukoil. While Beijing has its own fleet of tankers and insurers, the scale of Russian exports makes it difficult to fully replace Western services. Traders say some Chinese buyers are already hesitating to sign new contracts, fearing they could be cut off from global financial markets.
The Chinese government has condemned the sanctions, calling them “illegal unilateral measures” that violate international trade norms. Foreign Ministry spokesperson Mao Ning said Beijing would “firmly safeguard the legitimate rights and interests of Chinese enterprises.” But behind the rhetoric, officials are quietly exploring contingency plans, including increased purchases from Iran and Venezuela, both of which are also under U.S. sanctions but have long supplied crude to China.
For Beijing, the stakes are high. Energy security is a cornerstone of President Xi Jinping’s economic strategy, and any disruption to oil supplies risks undermining growth at a time when the Chinese economy is already grappling with slowing demand and a property sector slump.
Global Oil Markets on Edge
The sanctions have sent shockwaves through global oil markets. Brent crude prices jumped more than 3 percent on Thursday, topping $92 a barrel, as traders weighed the potential loss of millions of barrels of Russian supply. Analysts warn that if China and India sharply curtail purchases, Russia may struggle to find alternative buyers, forcing it to cut production. That could tighten global supplies and drive prices higher, with ripple effects for inflation worldwide.
Moscow has vowed to resist the pressure. Russian President Vladimir Putin denounced the sanctions as “economic warfare” and promised to redirect exports to “friendly nations.” But with China and India under strain, the pool of willing buyers is shrinking. Countries such as Turkey and some African states may increase purchases, but they lack the capacity to absorb the volumes that China and India have been taking.
For Ukraine, the sanctions are a welcome development. President Volodymyr Zelenskyy praised the move as a “resolute and well‑targeted decision” that would deprive Russia of resources to continue its war. European leaders also expressed support, with the UK and EU expected to announce parallel measures in the coming days.
Strategic Stakes for Washington
For the United States, the sanctions serve both economic and strategic goals. By targeting Rosneft and Lukoil, Washington aims to cut off a major source of revenue for the Kremlin, which relies on oil and gas taxes for roughly a quarter of its federal budget. At the same time, the move pressures China and India to align more closely with Western sanctions policy, testing their willingness to prioritize cheap energy over geopolitical partnerships.
The strategy carries risks. If China and India resist and continue buying Russian oil through alternative channels, the effectiveness of the sanctions could be blunted. Worse, Washington could find itself in a standoff with two of the world’s largest economies, complicating broader efforts to manage competition with Beijing and deepen ties with New Delhi.
Still, U.S. officials insist the measures are necessary. Treasury Secretary Scott Bessent said the sanctions send a “clear message” that Russia’s aggression “will not go unanswered.” He added that Washington is prepared to impose secondary sanctions on entities that help Moscow evade restrictions, raising the stakes for Asian refiners.
Conclusion: A Fragile Energy Order
As of October 23, 2025, the global energy order is entering a new phase of uncertainty. The U.S. sanctions on Rosneft and Lukoil strike at the heart of Russia’s oil industry, but their impact will be felt most acutely in Beijing and New Delhi, where refiners must now navigate a treacherous landscape of geopolitical risk and economic necessity.
For India, the challenge is to secure affordable energy without jeopardizing its strategic partnership with Washington. For China, the task is to maintain supplies while avoiding isolation from global markets. For Russia, the sanctions threaten to erode one of its last reliable revenue streams. And for the United States, the gamble is that the disruption will weaken Moscow without alienating key partners.
The outcome remains uncertain. What is clear is that the sanctions have jolted the world’s two largest emerging economies, forcing them to confront the costs of their reliance on Russian oil. As markets adjust and diplomacy unfolds, the balance of power in global energy is once again in flux.
Reporting by Nick Ravenshade. Original reporting and analysis NENC Media Group.
Sources: Financial Express, MSN, Moneycontrol, News18, Reuters/MSN, CNBC, U.S. News, New Indian Express, Economic Times, NDTV.
Photo: WORKSITE Ltd. / Unsplash
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