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US sanctions Rosneft and Lukoil, in a change of approach

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Russia says it held exercise with strategic nuclear

weapons

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US says Putin-Trump summit plans on hold

By Dmitry Antonov, Pavel Polityuk and Jeff Mason

MOSCOW/KYIV/WASHINGTON, Oct 22 (Reuters) - The United

States hit Russia's major oil companies with sanctions on

Wednesday and accused the Russians of a lack of commitment

toward ending the war in Ukraine, as Moscow conducted a major

training exercise involving nuclear arms.

The new sanctions were unveiled one day after plans for a

summit between U.S. President Donald Trump and Russian President

Vladimir Putin fell apart. Trump told reporters he cancelled the

meeting because "it didn't feel right to me."

The U.S. Treasury Department said Russia's two largest oil

companies, Rosneft and Lukoil, were targeted in a bid to damage

Moscow's ability to fund its war machine.

The move marked a sharp turnaround for the White House,

which has veered between pressuring Moscow and taking a more

conciliatory approach aimed at securing peace in Ukraine. Only

last week Trump appeared ready to hold off on new actions

targeting Moscow.

"Now is the time to stop the killing and for an immediate

ceasefire," U.S. Treasury Secretary Scott Bessent said. Oil

prices extended gains after Bessent's comments, rising by more

than $2 a barrel.

For months, Trump has resisted pressure from U.S. lawmakers

to impose energy sanctions, hoping that Putin would agree to end

the fighting. But with no end in sight, he said he felt it was

time.

Trump said he was still not ready to provide Ukraine with

long-range Tomahawk missiles, which Kyiv has requested. Talking

to reporters as he met NATO Secretary General Mark Rutte, Trump

said it would take the Ukrainians at least six months to learn

how to use them.

Ahead of a meeting next week with Chinese President Xi

Jinping in South Korea, Trump said he would like to see Xi use

his influence on Putin to halt the fighting. Xi and Putin have

formed a strategic alliance between their countries.

In a fresh show of force, the Kremlin released video

showing General Valery Gerasimov, head of the General Staff,

reporting to Putin on the drills. Russia said it fired missiles

from ground launchers, submarines and aircraft, including

intercontinental ballistic weapons capable of striking the

United States.

Russia's Defence Ministry said its long-range Tu-22M3

strategic bombers flew over the Baltic Sea, escorted at various

points by fighter jets from foreign - presumably NATO - states.

At key moments in the war in Ukraine, Putin has issued

reminders of Russia's nuclear might as a warning to Kyiv and its

Western allies. NATO has also been conducting nuclear deterrence

exercises this month.

EU countries also approved a 19th package of sanctions

against Russia for its war against Ukraine, which includes a ban

on Russian liquefied natural gas imports, the Danish rotating

presidency of the EU said on Wednesday.

The Wall Street Journal said the United States lifted a

restriction on Ukraine's use of some long-range missiles

provided by Western allies, which would allow Ukraine to

increase attacks on targets inside Russia. In a social media

post, Trump denied the report.

On Wednesday, Sweden said it had signed a letter of

intent to export Gripen fighter jets to Ukraine, as European

governments act to boost Kyiv's defences in a war that has

ground on for three years and eight months since Russia's

full-scale invasion, and shows no sign of ending soon.

Ukrainian pilots have been in Sweden to test the Gripen, a

rugged and relatively low-cost option compared to aircraft such

as the U.S. F-35.

Kyiv aimed to receive and start using Gripens next year and

expected to acquire at least 100, President Volodymyr Zelenskiy

said during a visit to Swedish defence manufacturer Saab

.

TRUMP DOESN'T WANT WASTED MEETING

Russia and Ukraine pounded each other with heavy overnight

missile attacks as renewed uncertainty enveloped the U.S.-led

peace effort.

After months of stalled diplomacy, Putin and Trump spoke

last week and unexpectedly announced they would hold a summit in

Hungary soon.

But following a phone call on Monday between the two

countries' top diplomats, the White House said the next day that

Trump had no plans to meet Putin "in the immediate future".

Trump said he did not want to have a wasted meeting - something

the Kremlin said Putin also wanted to avoid.

U.S. Secretary of State Marco Rubio, departing

Washington for the Middle East on Wednesday, told reporters the

United States would still like to meet with Russia.

Russian officials said that preparations continued for a

summit. "The dates haven't been set yet, but thorough

preparation is needed before then, and that takes time," Kremlin

spokesperson Dmitry Peskov told reporters.

The summit delay came after Russia reiterated to the U.S.

its previous terms for reaching a peace deal, including that

Ukraine cede control of the whole of the southeastern Donbas

region, three sources told Reuters.

That amounted to a rejection of Trump's statement last week

that both sides should stop at the current front lines.

Russian Deputy Foreign Minister Sergei Ryabkov was quoted by

state news agency RIA as saying he could not confirm that Moscow

had conveyed its position as reported by Reuters.

SHARES IN EUROPEAN DEFENCE COMPANIES RISE

Through the first nine months of his second term, Trump has

pressed for an end to the conflict, the deadliest in Europe

since World War Two.

Sharply critical at times of Zelenskiy, he has also

expressed frustration with Putin.

European defence shares rose on the delay to the Putin-Trump

summit. Most European governments strongly back Kyiv and have

pledged to raise military spending to help Ukraine meet its

defence needs.

European Union leaders are due on Thursday to discuss a

proposal to use frozen Russian assets to extend a $163 billion

loan to Ukraine. Moscow says the scheme amounts to theft and has

vowed to retaliate.

(Reporting by Dmitry Antonov in Moscow, Pavel Polityuk in Kyiv,

Simon Johnson in Linkoping, Sweden, Tom Balmforth in London,

Jeff Mason, Steve Holland and Patricia Zengerle in Washington,

Reuters bureaux in Moscow, Kyiv and Stockholm; writing by Mark

Trevelyan and David Brunnstrom; editing by Ros Russell, Mark

Heinrich, Deepa Babington, Don Durfee and Lincoln Feast.)