Oil prices up by 4%, rouble strengthens: What happened as Trump announced new sanctions on Russian oil giants

“Every time I speak to Vladimir, I have good conversations and then they don’t go anywhere. They just don’t go anywhere,” Trump said, criticising Putin.

Rosneft and Lukoil account for approximately half of Russia’s oil production and about five per cent of global output.

Kremlin brushes off the announcement

Following the announcement, Maria Zakharova, a spokeswoman for the Russian Foreign Ministry, said Moscow had developed a “strong immunity” to such restrictions.

Brent crude futures went up $2.71, at $65.30 a barrel, while US West Texas Intermediate crude futures were up $2.56, at $61.06, news agency Reuters reported.

In the meantime, the Russian rouble strengthened against the US dollar. By 0950 GMT, the rouble was up 0.2 at 81.30 against the U.S. dollar in over-the-counter trade.

The US Treasury has given companies until November 21 to wind down their transactions with the Russian oil producers. Experts say that although sanctions carry a negative impact, companies could ramp up transactions till the given deadline.

Although oil and gas account for a quarter of Moscow’s budget, its main source of revenue remains taxing output, not exports. This is likely to soften the immediate impact of the sanctions on state finances.

Britain had also targeted the two oil giants, along with 44 shadow fleet tankers, last week to choke off Kremlin revenues. Separately, EU countries approved a 19th package of sanctions against Russia for the war, including a ban on imports of Russian LNG.

Oil prices had fallen over the past month because of oversupply concerns following OPEC+ production increases.

Refiners in India scramble

Unlike Russian stakeholders, Indian refiners have reportedly begun scrambling following Trump’s announcement, finding alternate sources for crude before the November 21 deadline to avoid exclusion from the Western banking system.

New Delhi has emerged as the largest purchaser of seaborne Russian oil since the beginning of the nearly four-year-old war, importing about 1.7 million barrels per day in the first nine months of this year, Reuters reported.

The Trump administration in August slapped a debilitating 50 per cent tariff on Indian goods over Russian oil imports, alleging New Delhi of financing the “Kremlin’s war machine.”

Since the tariffs were imposed, negotiations between Washington and New Delhi have faced setbacks with India calling them “unjustified and unreasonable” and pointing out that China – which faced lesser duties at the time – was the largest importer of Russian oil and Europe for that of Russian natural gas.

The sanctions, however, create a new set of woes for refiners in India.

(With Inputs from Reuters)