(The opinions expressed here are those of the author, a

columnist for Reuters.)

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US imposes sanctions on Rosneft, Lukoil

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India, Turkey will likely cut purchases of Russian oil

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Unclear if China will adhere to the sanctions

By Ron Bousso

LONDON, Oct 23 (Reuters) - U.S. President Donald Trump

imposed sanctions on Russia's two largest oil companies, marking

a significant escalation in his efforts to starve Moscow of

vital revenue to fund its war in Ukraine.

The effectiveness of these measures - which target Russia's

Lukoil and Rosneft - will, however, hinge on Trump's

willingness to enforce secondary sanctions and risk an energy

price spike.

Oil prices gained over 5% following news of the sanctions,

with traders fearing a drop in global oil volumes. Rosneft and

Lukoil collectively produce roughly 5% of global oil supplies,

or around 5.3 million barrels per day (bpd). Their combined

exports thus far in 2025 have accounted for 47% of total

seaborne exports of 3.5 million bpd, according to analytics firm

Kpler.

The U.S. designation of the two Russian companies, which

follows Britain's decision last week to hit Rosneft and Lukoil

with sanctions, cuts them off from the dollar-based financial

system.

At first glance, the new U.S. measures appear unlikely to

have a major impact on Russian exports, given that Russian

energy companies have in recent years developed efficient ways

to circumvent most Western financial systems and sanctions,

including the use of so-called "shadow fleets". Russian crude

oil and refined products exports have only declined slightly

since Russia's invasion of Ukraine, falling from 8 million

barrels per day in 2022 to 7.5 million bpd in 2024.

Crucially, however, the new sanctions expose any foreign

company dealing with the two Russian firms to possible secondary

U.S. sanctions.

The key questions then are how India and China - the two

biggest buyers of Russian crude - will respond, and whether

Trump will be willing to tighten the screws on them if they

don't.

INDIA IS LIKELY TO BE ONBOARD

Up until recently, India had been strengthening its energy

ties with Moscow.

India purchased 1.9 million bpd of Russia's crude in the

first nine months of 2025, 40% of its total exports, according

to the International Energy Agency. And Rosneft owns a 49% stake

in India's 400,000 bpd Vadinar refinery.

However, New Delhi is facing heavy pressure from Trump to reduce

Russian crude purchases in exchange for a reduction in U.S.

import tariffs. India is therefore likely to respond swiftly to

the new sanctions by cutting Russian oil imports, even if it is

painful for India's domestic refining industry.

Turkey, the third largest buyer of Russian oil, is also

likely to halt purchases.

CHINA IS THE REAL TEST

The real test will be the reaction of China, the largest

buyer of Russian crude.

China imported 2.1 million bpd of Russian oil between

January and September via land and sea, roughly 18% of the

country's total crude imports. Imports from Russia via the ESPO

pipeline, which delivers oil from fields owned by Rosneft,

account for around 40% of that.

China may choose to pull back on its imports initially as a

precautionary measure, especially if the U.S. move sparks a

sustained price increase, but it is far from clear whether

Beijing will comply with the sanctions, as it has repeatedly

criticised previous measures.

Trump has so far refrained from putting heavy pressure on

China over its Russian oil and gas purchases. While Washington

has put sanctions on some small Chinese refineries, it has yet

to take any action against Chinese companies involved in

importing LNG from the heavily sanctioned Arctic LNG 2 facility

in Russian Siberia.

If Trump chooses to target major Chinese companies with

secondary sanctions, that would likely lead to retaliatory

measures from Beijing. The two global superpowers are already

locked in tense trade talks.

TIMING IS ON TRUMP'S SIDE

Trump may also be concerned about generating a sustained

price spike, something that would be very unpopular with U.S.

consumers.

But timing could be on his side.

If both China and India were to cut all or part of their

Russian oil purchases, which make up nearly 75% of Russia's

crude sales, the market would need to source up to 4 million bpd

from alternative supplies.

However, the oil market is currently believed to be facing

significant oversupply. The IEA forecasts a surplus of 2.35

million barrels per day in 2025 and 4 million bpd, or nearly 4%

of global demand, next year.

The current projected surplus, therefore, offers Trump a

significant cushion should he choose to further curb Russia's

crude exports revenue.

Ultimately though, Russia is a big cog in the global oil

market. If U.S. measures to limit Moscow's exports are sustained

and effective, this would inevitably lead to higher oil prices

and market turmoil, which Trump will almost certainly want to

avoid.

Trump may be betting that the threat of financial pain will

bring Putin to the negotiating table quickly, limiting the risk

of a sustained spike in oil prices that could hit U.S.

consumers.

Whether he is willing to make that gamble - and also risk

upsetting China - should become clear in the coming weeks.

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(Ron Bousso; Editing by Emelia Sithole-Matarise)