New Sanctions Aim at Heart of Russia’s Economy, but Russia Has Prepared
While oil markets reacted strongly to the sanctions, analysts said the measures were unlikely to significantly change President Vladimir V. Putin’s war calculations.
By Anton Troianovski and Ivan Nechepurenko
Oct. 23, 2025Updated 10:21 a.m. ET
Vladimir V. Putin’s tactical triumph didn’t last long.
A week ago, it looked as if the Russian president had outmaneuvered his adversaries yet again with a deftly placed call to President Trump that scuttled any expansion in American support for Ukraine.
But on Thursday, Russians awoke to new American sanctions against their oil industry. It is the most direct punitive measure that Mr. Trump has taken against Russia in his second term, after electing not to follow through on a series of earlier threats.
The sanctions, which take aim at the heart of the Russian economy, dealt one of the biggest blows so far this year to Mr. Putin’s effort to cajole Mr. Trump into forcing Ukraine to capitulate to Russia’s main demands, including the concession of territory Ukraine still holds.
Still, analysts who study Mr. Putin said the new sanctions were unlikely to change the Russian president’s war goals. Russian companies have long been preparing for the possibility of increased sanctions, said Tatiana Stanovaya, the founder of the political analysis firm R.Politik. Mr. Putin remains willing to bear enormous losses to accomplish his aims, she said, and Mr. Trump may well change his mind again.
“They’ll shrug their shoulders and say, ‘OK, he’ll ripen in three months,’” Ms. Stanovaya said of Russia’s reaction to Mr. Trump’s sanctions. “For Putin, this war remains existential, and he is ready to endure a lot.”
Oil prices rose sharply on Thursday in a sign of the sanctions’ potential potency, which may ultimately depend on how the penalties are enforced and how energy buyers react to them. The new measures target Russia’s two largest oil companies, Rosneft and Lukoil, and anyone doing business with them around the world.
The sale of oil and gas accounts for about a quarter of the Russian budget, and the sanctions come at a time when the Russian oil industry is already under stress from increasingly sophisticated long-range strikes by Ukraine. But some analysts in Russia predicted that the new penalties would have a muted impact.
They noted that Russia had become adept at evading restrictions by using a fleet of hundreds of old vessels uninsured by Western companies and by conducting transactions through buffer companies in third countries. And because Russia accounts for about nine percent of global oil sales, any restrictions against its exports would cut supply and push prices up, creating incentives for further sanction evasion.
The departing Biden administration enacted similar sanctions in January against two other large Russian oil companies, Surgutneftegaz and Gazpromneft. Those sanctions had a limited impact on those companies, largely because of lax enforcement of the sanctions under Mr. Trump, said Sergey Vakulenko, an energy expert at the Carnegie Endowment for International Peace.
“Lukoil will face serious problems, but these will be Lukoil’s problems, not Russia’s,” Mr. Vakulenko said, referring to one of the Russian oil giants sanctioned on Wednesday.
But the broader Russian economy does face problems, even if they are not enough to force Mr. Putin to change course, analysts say. Before this week’s move, Russia’s oil and gas revenues were already projected to decline to around $100 billion this year from nearly $135 billion in 2024, largely as a result of the lower price of oil. And the Russian central bank’s efforts to dampen inflation by raising rates have halted a wartime boom, bringing the economy’s growth rate to around 1 percent this year compared with more than 4 percent in 2023 and 2024.
The latest turn in the volatile U.S. approach to Mr. Putin came after the Russian president appeared to succeed last week in convincing Mr. Trump that a Ukraine peace deal might be within reach. Mr. Trump declared after his call last Thursday with Mr. Putin that they would soon meet in Budapest and that he was not ready to provide Ukraine with the powerful Tomahawk cruise missiles that it was seeking.
But this week, Russia made it clear that there still was no quick cease-fire in the offing. Sergey V. Lavrov, the Russian foreign minister, said Russia remained focused on addressing the war’s “root causes” before stopping the fighting, a reference to Russia’s demand both for more Ukrainian land and for a decisive say over Ukraine’s future.
Mr. Trump then canceled plans for the meeting in Budapest, and he griped on Wednesday, “Every time I speak with Vladimir, I have good conversations, and then they don’t go anywhere.” Treasury Secretary Scott Bessent called on Russia to agree to “an immediate cease-fire” as he announced the new sanctions.
But Mr. Putin appears unwilling to stop the war at the current front lines, as Mr. Trump has also demanded, with Russian troops advancing — slowly and at great cost — on the battlefield.
The Russian Foreign Ministry said on Thursday that the country had developed “immunity” to Western sanctions and that the American president risked going down the same path as the Biden administration in trying to pressure Russia.
“If the current U.S. administration starts following the example of its predecessors,” the foreign ministry’s spokeswoman, Maria V. Zakharova, said, “the result will be exactly the same — disastrous from a domestic political perspective and detrimental to global economic stability.”
Ukraine welcomed the sanctions on Thursday, after another round of Russian drone and missile strikes killed at least one person and injured 51 others. To Ukrainians, the new American measures were a sign that Mr. Trump was finally seeing the need to compel Russia to end its war.
“We were waiting for them — God bless, I hope they will work,” President Volodymyr Zelensky said of the sanctions in an exchange with journalists in Brussels, where he joined a European Union leaders’ summit.
“The new U.S. sanctions against Russia’s oil giants are a clear signal that prolonging the war and spreading terror come at a cost,” Mr. Zelensky said on social media. “This is a fair and absolutely deserved step,” he added.
The U.S. sanctions came just before the European Union’s decision on Thursday to approve its own new round of sanctions. They ban imports of Russian liquefied natural gas while also targeting the country’s banks and cryptocurrency exchanges and placing travel limits on its diplomats.
But Ukraine has argued that tougher sanctions are not enough to force Mr. Putin to negotiate in earnest. Also needed, the country says, are more powerful weapons like the Tomahawks it is seeking to buy from the United States.
“Russia’s willingness for diplomacy has somewhat faded,” Mr. Zelensky said on Wednesday, “and our long-range capabilities can bring Russia to the table in a way that can truly end this war.”
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