Yuri Kobzar15:45, 25.10.25

In three years, Russia has learned to circumvent simple oil sanctions.

New US sanctions against Lukoil and Rosneft are unpleasant for Russia, but not fatal. This is in part because the restrictions are being introduced with a one-month grace period, rather than immediately. This gives Russia time to prepare, the Financial Times reports .

The publication notes that the sanctions imposed this week against Rosneft and Lukoil are potentially very serious, as these two companies account for approximately half of Russia’s daily oil production. Rosneft alone generates approximately 17% of Russia’s budget revenue.

According to analysts, these two oil companies will now be forced to build new supply chains to avoid direct transactions between oil buyers and sanctioned Russian sellers. Tatyana Mitrova, a research fellow at the Center for Global Energy Policy at Columbia University (USA), believes the Russians will resort to their now-familiar tactic of creating a multilayered ecosystem of fictitious shell companies and intermediaries.

According to Mitrova, overall for Russians, “this is a very unpleasant situation,” but “not fatal.” “There will be a decline in November and December, when the measures come into effect, but volumes will likely recover later,” she said.

According to the Financial Times, the Russian oil sector as a whole had ample time to prepare for new Western sanctions and was even surprised by Trump’s extension, imposing sanctions with a one-month grace period. Rosneft and Lukoil can benefit from the experience of other sanctioned Russian companies, such as Surgutneftegaz and Gazpromneft.Read also:

Moreover, the decline in export volumes may be partially offset by the fact that global oil prices have risen slightly following the introduction of new sanctions against Russia.

“Russian oil companies, associated oil traders, and buyers have been engaging in this practice for three years now. As long as there’s a willing buyer, a workaround will likely be found,” said Ronald Smith, founder of Emerging Markets Oil and Gas Consulting Partners.

However, this doesn’t mean sanctions are pointless. Experts say this creates not just additional headaches for Russians, but also very real material losses. To remain in the market, Russians are forced to offer buyers additional discounts on their oil; otherwise, they simply wouldn’t want to deal with sanctioned oil. Furthermore, each shell company incurs additional costs, and each intermediary charges a commission, which also eats into Russian oil producers’ revenue.

(C)UNIAN 2025