Russia, at war, faces double trouble: Trump ultimatum and a hit to oil sales to India

President Vladimir Putin, who sent troops into Ukraine in 2022, has been in discussions with U.S. President Donald Trump for months about a possible way to end the war but with no breakthrough so far.

WHAT DID THE U.S. DO?

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) on October 22 imposed sanctions on Rosneft and Lukoil and a number of their subsidiaries as it called on Moscow to immediately agree to a ceasefire.

The two firms account for around a half of Russia's oil production and more than 5% of global crude output.

In January, the U.S. Treasury declared sanctions against the Russian energy sector, including oil majors Gazprom Neft SIBN.MM and Surgutneftegaz, but the measures did not significantly interrupt Russian oil exports.

The U.S. has already introduced sanctions against the so-called shadow fleet which handles Russia's oil exports, while some lawmakers have sought still tougher measures.

Those sanctions target more than 180 vessels and dozens of oil traders, oilfield service providers, insurance companies and energy officials.

WHAT DID INDIA DO?

Indian refiners including top buyer Reliance Industries RELI.NS plan to reduce or halt its Russian oil imports, according to two sources familiar with the matter.

India has come under increased U.S. pressure to curb its purchases amid trade talks with Washington.

It bought 1.9 million barrels per day (bpd) in the first nine months of 2025, or 40% of Russia's total exports, according to the International Energy Agency.

WHAT DOES IT MEAN FOR RUSSIA?

Increased sanctions are likely to force Russia to offer deeper discounts to buyers to sustain its exports.

Oil and gas revenue accounts for up to a quarter of Russia's budget and is the most important source of cash for Moscow's military campaign in Ukraine, now in its fourth year.

But these mineral extraction taxes are paid at the oilfield, so sanctions will only hit the budget if Russia is forced to cut production.

HOW COULD RUSSIA RESPOND?

The Kremlin earlier this month pushed back against Trump's warning that the Russian economy was going to collapse, saying that Russia had considerable reserves and was strong enough to allow Putin to achieve his goals.

Halting its crude exports is one option but that would hurt allies such as China and achieve the result that the West seeks - a slash to Moscow's revenue and its war coffers.

Russia's other options include cutting off other important exports such as enriched uranium, palladium or titanium, though that would also hurt its own economy.

Another option would be to increase rare-earth cooperation with China. Russia has the world's fifth-largest reserves of rare earth metals, according to U.S. Geological Survey (USGS) data, and a tie-up with top player China would thwart U.S. efforts to counter Beijing's dominance.

Russia also has some leverage against Western oil majors as it handles Black Sea exports via the Caspian Pipeline Consortium which mainly carries crude from Kazakhstan.

That oil is pumped by a group that includes U.S. majors Chevron and Exxon Mobil.

Squeezing those exports would hurt Kazakhstan, however, with which Russia has close economic and security ties.

WHAT ABOUT OPEC+?

Russia is a leading member of OPEC+ which unites the Organization of the Petroleum Exporting Countries and allies and accounts for about half of the world's oil output.

OPEC+ in recent months has been unwinding production curbs to regain market share, but a squeeze on Russia's exports could hobble the group's efforts to agree on further increases.

WHAT ABOUT CHINA?

Along with India, China is a major buyer of Russian crude. The two countries declared a "no limits" partnership in February 2022 when Putin visited Beijing just days before he sent tens of thousands of troops into Ukraine, triggering the deadliest land war in Europe since World War Two.

Russia accounts for about 20% of China's crude imports.

On Oct 23, China's foreign ministry reiterated its stance against unilateral sanctions in comments about the U.S. restrictions against Rosneft and Lukoil.