U.S. Sanctions on Rosneft and Lukoil: Benjamin Hilgenstock Explains the Impact on Russia’s Oil Revenues

The United States has imposed its toughest sanctions yet on Russia’s energy industry, focusing on Rosneft and Lukoil. These are the country’s two largest oil producers. The measures aim to restrict Moscow’s access to global markets and increase pressure on the Kremlin’s war financing.

In a detailed Financial Times analysis, experts examined how these sanctions could reshape global oil trade. They may also deepen Russia’s fiscal strain as the government faces a tightening budget environment.

Benjamin Hilgenstock on Russia’s Budget Vulnerability

“The sanctions come at a time of heightened vulnerability for the Russian budget,” said Benjamin Hilgenstock, head of macroeconomic research and strategy at the Kyiv School of Economics Institute (KSE Institute).

He explained that energy revenues make up about one-quarter of Russia’s federal income. Moreover, these revenues have fallen by 20 percent year-on-year in 2025. Therefore, Washington’s new sanctions could further intensify financial pressure on the Kremlin and limit its ability to sustain long-term spending.

Market Reaction: Rising Oil Prices and Global Adjustments

The Financial Times report also looked at market reactions following the sanctions announcement. Brent crude prices rose by 9 percent, as traders assessed possible disruptions to Russian exports. However, analysts warned that while China and India may initially resist pressure from Washington, secondary sanctions could change their stance. Over time, refiners might diversify their oil supplies, testing Russia’s ability to maintain production and revenue.

Read the Full Analysis

To read Benjamin Hilgenstock’s complete commentary and the full Financial Times article, visit FT.com. In addition, explore the KSE Institute’s homepage for more insights and expert research.

Further Reading: Sanctions and Russia’s Energy Economy

Energy exports remain a cornerstone of Russia’s economy and a major source of geopolitical power. By targeting the oil and gas sector, sanctions aim to reduce state revenues and limit Moscow’s ability to wage war against Ukraine. For deeper insights, visit the Sanctions Portal Evidence Base to explore current research on energy sanctions and their impact on Russia’s economy.