US President Donald Trump has hit Russia harder than any Ukrainian missile, Newsweek writes in its analysis.
Russian oil giant „Lukoil“ agreed to sell its foreign assets to a US investment firm on Thursday, a major sign that President Donald Trump's sanctions on Moscow are working.
„Lukoil“, the country's largest non-state enterprise by revenue, has stood out among Russian energy giants for its international reach. Unlike state-owned companies such as „Rosneft“, „Lukoil“ has invested abroad, developing refineries in Europe, mining assets in the Middle East and gas stations on several continents: it owns about 200 such stations in the US, scattered across New Jersey, New York and Pennsylvania.
For decades, this has given Moscow leverage abroad and to some extent protected “Lukoil“ from internal turmoil at home.
In October, the US announced sanctions on “Lukoil” and “Rosneft” in an attempt to tighten financial pressure over Russia's war in Ukraine. Britain followed with its own restrictions, targeting both the companies and tankers from the shadowy fleet accused of helping Russia circumvent existing restrictions on oil exports.
The proposed sale – valued by some estimates at around $22 billion – comes as Lukoil faces crippling US sanctions and asset sale conditions, and could deal a huge economic blow to the Kremlin.
In the first major action on sanctions against Russia in Trump's second term, they "blocked" all of Lukoil's assets and interests located in the US or controlled by Americans - essentially meaning they are frozen and cannot be used or transferred. The sanctions were applied not only to the parent company but also to many of its subsidiaries and affiliates, widening their impact.
This is a significant hit to Russia's tax revenues at a time when the Kremlin can least afford it. Unlike state-controlled energy giants, Lukoil's overseas operations generated steady profits that flowed back to Russia through dividends and corporate taxes. The forced removal of these assets from Russian ownership sharply reduced the amount of revenue Moscow has access to outside its borders.
Russia’s federal budget remains heavily dependent on oil and gas revenues. In wartime, Russia compensates with high defense spending, taxes, and massive borrowing. But when the war is finally over, the country will face huge reconstruction costs and pressures to improve living standards. Sanctions do more than tighten the noose during the war. They send a damaging signal about the sustainability of Russian corporate power abroad and squeeze Russia’s fiscal capacity after the war.
Analysts say Putin sees little incentive to compromise, even as his forces face increasing strain along a front line stretching some 600 miles. By their assessment, the Kremlin believes time is on its side – betting that Western political unity would falter, military aid to Kiev would decline, and Ukraine's ability to resist would erode under continued pressure. To maintain momentum on the battlefield, Russia has stepped up its efforts to fill its ranks, offering cash incentives, recruiting from prisons, and attracting foreign nationals to bolster its forces.
Ukrainian President Volodymyr Zelensky, for his part, has renewed calls for tougher sanctions on Moscow, arguing that additional economic pressure is needed to force the Kremlin into meaningful concessions. The sale of “Lukoil“ is a clear indication that he is right.