What You Need to Know
- Key takeaway #1
Both the United States and UK imposed blocking/asset freezing sanctions on Russia’s two largest oil companies—Rosneft and Lukoil—along with their global subsidiaries, signaling a marked escalation in direct sanctions on Russia’s energy sector.
- Key takeaway #2
There is increasing pressure on third countries buying Russian crude, with the EU and UK sanctioning entities in China, India, and other third countries for assisting Russian oil exports, and introducing prohibitions on the import of petroleum products refined outside Russia from Russian-origin crude.
- Key takeaway #3
The EU is set to impose a phased ban on imports of Russian liquified natural gas, further tightening energy trade restrictions and aligning its approach with the United States and UK.
- Key takeaway #4
The EU and UK continue to target Russia’s shadow fleet, military supply chains, and advanced technology services, such as commercial space, AI, and high-performance computing.
Overview
The United States, European Union, and United Kingdom have significantly escalated Russia-related sanctions the past month, including the Trump Administration’s first sanctions directly imposed on Russia. These coordinated actions—which particularly target the Russian energy sector—indicate that Russia sanctions remain on the geopolitical agenda and require multinational companies to remain vigilant in their compliance with those sanctions.
Below are key themes and actionable insights for corporate compliance, legal, and risk functions. For further details on the specifics of each these sanctions measures, please see our accompanying blog posts here (UK) and here (EU), as well as the U.S. Treasury Department’s press release (US).
U.S. and UK Target Russian Oil Majors, Rosneft and Lukoil
- Rosneft and Lukoil Sanctioned: As has been widely reported, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed blocking/asset-freezing sanctions on Rosneft and Lukoil on Wednesday October 22, 2025, along with dozens of subsidiaries. This followed similar action by the UK a week earlier.
- Wind-Down Licenses Available: Both the United States and UK issued general licenses (“GLs”) to winddown transactions with Rosneft, Lukoil and their subsidiaries. U.S. GL 126 (which allows a wind-down of activities with Rosneft and Lukoil, as long as payments are made into a blocked account) and U.S. GL 127 (which allows the divestment or transfer of Rosneft or Lukoil debt or equity) run through 12:01 am EST on November 21, 2025, and UK GL INT/2025/7539056 applies until 23.59 (BST) on November 28, 2025.
- Impact on Global Oil Markets: Rosneft and Lukoil are Russia’s two largest oil companies. To date, the United States, EU and UK have held off sanctioning these companies due to their importance in the global energy market. The United States issued the new sanctions after U.S. markets closed on October 22, 2025, likely to ensure maximum impact. Oil prices rose following the announcement, with Brent crude 5% higher the following morning.
- Extends to Global Subsidiaries: By targeting the parent companies, the U.S. and UK sanctions also apply to any entity that Rosneft or Lukoil owns (and, under UK rules, controls).
- This is of particular significance to Lukoil, which still has a large presence outside of Russia through its retail service stations, including stations in Europe and the United States, and a refinery in Bulgaria, an EU member state (Lukoil Bulgaria). The United States has issued Russia-related GL 128, which authorizes certain transactions beyond merely wind-down transactions involving Lukoil retail service stations located outside of Russia, through 12:01 am EST on November 21, 2025, and the Bulgarian government is reportedly considering options to manage the fallout.
- The U.S. and UK sanctions also impact Rosneft subsidiaries in Germany, which own three German refineries, despite them being operated under German Government trusteeship. The UK has issued an additional general licence to enable ongoing business operations with the Rosneft German subsidiaries. The German Government is reportedly seeking a similar licence from the U.S. authorities.
- No Analogous EU Action: Although the EU issued its 19thsanctions package on Russia this week, it has not followed suit by sanctioning Rosneft and Lukoil. Rather, it has sanctioned Litasco Middle East Trading DMCC, a Lukoil UAE trading entity, and further tightened its existing transaction ban on Rosneft.
Increasing Pressure on Third Countries Buying Russian-Origin Crude
The latest sanctions packages ratchet up pressure on third countries – such as India and China – who continue to source Russian-origin energy through a variety of measures:
- UK Processed Petroleum Products Ban: The UK has announced that it will introduce a ban on the import of oil products refined in third countries from Russian-origin crude, aiming to address indirect flows of Russian oil into global markets. This follows the EU’s similar prohibition, which comes into effect on January 21, 2026.
- UK/EU Sanctions on Indian and Chinese Parties: Despite not officially maintaining secondary sanctions programs, both the UK and EU have designated companies in third countries for their involvement in supporting the Russian energy sector by purchasing Russian crude. Examples include Nayara (an Indian refinery previously subject to EU sanctions that is also owned 49% owned by Rosneft), Chinese refineries Liaoyang Petrochemical and Shandong Yulong Petrochemical, and Beihai LNG terminal (a Chinese terminal importing LNG from the sanctioned Arctic LNG 2 project).
- U.S. Secondary Sanctions Threat: OFAC can impose secondary sanctions for providing “material” support to Rosneft or Lukoil, or for operating in the energy sector of Russia (e.g., potentially triggered by engaging in significant Russian energy-related transactions with Rosneft or Lukoil). For many third-country operators and banks, the threat of secondary sanctions (which can cut companies off from the U.S. financial system) will deter them from ongoing business with Rosneft and Lukoil. Additionally, the “operating in the energy sector” sanctions authority has been in place since January 10, 2025, but the designations of Rosneft and Lukoil make the risks of dealing in Russian energy more apparent.
Purchasers in India and major companies in China have tended to avoid purchasing from sanctioned sellers or intermediaries. This is true even for Chinese purchases of Iranian oil, which for the most part are made by independent, so-called “teapot” refiners that have limited exposure to the international financial system. The impact of these designations, and Russia’s ability to mitigate, will depend in part on whether major third-country buyers continue to eschew purchases from sanctioned parties, and how much volume can be absorbed by buyers willing to accept the sanctions risks.
EU Takes Steps to Cut-Off Russian LNG
- Limited EU Sanctions to Date: Although both the United States and UK have already banned the import of Russian-origin LNG, the EU had not imposed similar restrictions given its historic dependency on Russian LNG. It had only introduced a ban on reloading services for Russian LNG on EU territory for the purpose of transshipment to third countries.
- Future Import Ban: In the latest package, the EU announced that it will prohibit the purchase, import or transfer, directly or indirectly, of Russian LNG from April 25, 2026, except for any contracts entered into before June 17, 2025, and lasting more than a year. For these historic contracts, the prohibition comes into effect on January 1, 2027 (provided the contract is not amended post-June 17, subject to certain limited exemptions).
Maritime Sector, Military Support, and Advanced Services Remain a Focus
Finally, both the EU and UK have continued to target vessels within the “shadow fleet” used to transport Russian oil, in an effort to curtail support for Russia’s military and industrial complex.
- Shadow Fleet: The UK specified an additional 51 ships, including 44 identified as part of the “shadow fleet” used to transport Russian oil. These vessels are now prohibited from accessing UK ports and have had any UK registration revoked. Various international registries providing false flags to vessels have similarly been sanctioned. An additional 117 vessels have been added to the list of vessels subject to an EU port access ban and other services restrictions.
- Military and Industrial Support: The UK imposed asset-freezing sanctions on companies that have been supplying electronics critical for Russian drones and missiles, including companies based in Thailand, Singapore, Turkey and China. The EU also identified 45 new entities directly supporting Russia’s military and industrial complex by enabling the circumvention of advanced technology exports. These include entities in Russia and third countries (China, Hong Kong, India and Thailand). These entities are now subject to tighter export restrictions with regard to dual-use goods and other advanced goods and technologies.
- Special Economic Zones and Services Prohibitions: The EU introduced investment and business prohibitions on Russian special economic/procurement zones. The EU has also restricted the provision of commercial space-based services, artificial intelligence services, and high-performance computing to Russian entities.
What to Make of the U.S. Re-Engagement?
For the last nine months, EU and UK Russia-related sanctions have continued along the same trend line as they had since 2022: a one-way ratchet of increasing pressure on a widening scope of target industries. The change has been from the United States, where we have seen virtually no expansion of Russia-related pressure (aside from letting a general license for Russia-related energy purchases expire, a single round of export restrictions on Turkish entities diverting U.S. origin goods on the Common High Priority List (CHPL) to Russia, a handful of sanctioned vessels with ties to Iran and Russia, and the imposition of “secondary” tariffs on India for purchases of Russian petroleum).
In many ways, last week’s announcement of the U.S. actions against Rosneft and Lukoil felt like a return to normalcy. As described above, the U.S. action hit the same targets, with a similar timing, as America’s allies. The critical question is: Was this a one-off reaction to a failed attempt at a Presidential summit? Or was it a sign of a deeper loss of patience with President Putin’s unwillingness to credibly commit to a ceasefire?
What’s Next?
The rapid, near-simultaneous rollout of these measures is unlikely to be coincidence and may signal that the Trump Administration is more directly coordinating with the EU, UK, and other G7 countries on imposing future sanctions on Russia, or potentially on enforcement of these sanctions.
The measures also represent a critical escalation in efforts from the U.S., EU and UK to isolate Russia’s energy, financial, and industrial sectors. For the first time, two of the three major sanctioning regimes have imposed direct sanctions against Russia’s leading oil majors; it remains to be seen whether, now that the U.S. and UK have acted, the EU will follow suit and target Rosneft and Lukoil as part of its (as yet unannounced) future 20thpackage. In a sign that it is weaning itself off Russian energy dependency, the EU has joined the U.S. and UK to extend controls over Russian LNG.
The EU and the UK have also continued their trend of targeting a wide array of third-country entities facilitating Russia’s sanctions evasion and military procurement.
Key implications for multinational businesses include:
- Remain Vigilant: Direct and indirect transactions, ownership structures, and supply chain ties require fresh diligence—not only for Russian companies and their immediate subsidiaries, but also across global networks involving third countries. Russia will seek to sustain its oil exports, including via networks of third-country entities that help obscure links to sanctioned producers.
- Be Prepared for Scrutiny: Regulatory scrutiny and enforcement activity will likely accelerate—especially if the renewed aggressive posture from the United States is sustained—as authorities coordinate their efforts and share intelligence across borders.
- Anticipate fast-paced changes: The wind-down periods for Lukoil and Rosneft are particularly short (assuming no extensions) and will require quick reactions. Further measures (including additional secondary sanctions) remain likely.
These developments underscore the importance of robust sanctions compliance frameworks and cross-functional coordination within multinational organizations. Proactive engagement with legal, risk, and compliance teams – and scenario planning for future rounds of sanctions – remain essential.
For further information, please contact:
Caroline E. Brown, Partner, Crowell & Moring
cbrown@crowell.com
