UK Hits Rosneft, Lukoil and 51 Oil Tankers with Sanctions

Britain imposed new sanctions Wednesday on Russia’s two largest oil producers, Rosneft and Lukoil, and 51 ships, including 44 “shadow fleet” tankers and seven LNG vessels, Reuters reported.

HM Treasury said the companies were designated under the UK’s Russia sanctions regime for supporting the Russian state, making them subject to asset freezes, director disqualification, transport restrictions and a ban on UK trust services. London called both firms “strategically significant” to Moscow, noting their contribution to state finances that fund the war in Ukraine.

Rosneft produces about 40% of Russia’s crude oil while Lukoil is the second-largest producer with the broadest foreign exposure among domestic peers, the news outlet said.

“We are introducing targeted sanctions against the two biggest oil companies in Russia,” UK finance minister Rachel Reeves said while traveling in the United States. “At the same time, we are ramping up pressure on companies in third countries, including India and China, that continue to facilitate getting Russian oil onto global markets.”

She added there is “no place for Russia in global markets” and vowed to take all necessary steps to cut off war financing, according to the Reuters report.

The sanctions package also targets parts of Russia’s LNG supply chain, including the Chinese Beihai LNG terminal, which has imported cargoes from the sanctioned Arctic LNG 2 project.

Nayara Energy, the Mumbai-based refiner whose largest shareholder is Rosneft and which is already under EU sanctions, was also designated by HM Treasury, Reuters said.

Oil traders interviewed by the news agency believe that the UK measures will shrink access to shipping and insurance for Russian barrels that still move to Asia with support from British providers, likely pushing more flows to Russia’s shadow fleet.