For the first time in nearly four years of war, the U.S. has taken direct aim at the beating heart of Russia’s economy: its oil exports.
The Trump administration’s new sanctions on Rosneft and Lukoil, Russia’s two biggest energy companies, block both American and foreign firms from doing business with them. In practical terms, that means any bank or corporation that wants access to U.S. markets now has to choose—us or them.
It’s a major escalation. With these measures, over 75% of Russia’s oil exports are now under Western sanctions. The move comes after months of stalled diplomacy, as Trump reportedly grew frustrated with Putin’s refusal to strike a peace deal in Ukraine. After trying the carrot, he’s finally reached for the stick.
The timing matters. Russia’s finances are starting to buckle. Its once-strong energy revenues are down sharply, its budget deficit is ballooning, and its vaunted “rainy day” sovereign wealth fund has dwindled from hundreds of billions to around $50 billion. The war has turned into a treadmill of attrition—territorially, militarily, and financially—and Moscow is running out of runway.
Unlike the Iraq or Iran sanctions of past decades, these aren’t meant to destroy an economy overnight. They’re designed to bleed it slowly. Russia can still sell oil—to China, India, and a few others—but only at steep discounts and in currencies it doesn’t want, like yuan and rupees. The dollar system, centered on SWIFT and U.S. clearinghouses, still rules global trade. For now.
That’s the hidden risk. Every time Washington uses the dollar as a weapon, it gives the rest of the world another reason to find a way around it. De-dollarization is still a distant prospect, but a real one. The dollar’s share of global reserves has slipped below 60% for the first time in decades. Too much pressure, and countries will start building parallel systems—China already is.
So the new sanctions are both a warning shot and a test. For Putin, it’s a countdown: he has maybe a year before his war chest runs dry. For the United States, it’s a question of restraint: how much can you weaponize a financial empire before you start eroding the very power that makes it work?
