The U.S. sanctions on two Russian oil giants, Rosneft and Lukoil, came into effect on Nov 21, 2025. These sanctions affect not only the two companies per se but also their counterparties worldwide under the secondary sanctions clause. For the EU, these sanctions highlight a central trade-off: how to exert real pressure on Russia without fracturing political alignment among EU Member States. This brief discusses the consequences of the sanctions, including their immediate impact on the firms and Russia’s budget, the new tensions exposed in Europe’s energy policy, and the broader lessons for the next generation of EU sanctions tools.

Key issues from the FREE Network Policy Brief

• U.S. secondary sanctions cut deep because any bank facilitating transactions for Rosneft or Lukoil risks losing access to the dollar system, prompting traders, refiners, and even governments to abruptly change course.
• The sanctions caused sharp financial and operational strain on the Russian firms, including share price drops, forced asset sales, reduced access to payments, and steeper price discounts on Russian crude - pressuring both company earnings and Russia’s federal budget.
• Paradoxically, EU sanction exemptions have created uneven burden-sharing: countries historically reliant on cheaper Russian oil have been able to keep trading. Under U.S. secondary sanctions, those same countries face mounting pressure to diversify their energy mix—straining political unity and raising longer-term questions about how Member States should coordinate sanctions.

Meet the authors

• Maria Perrotta Berlin: Assistant Professor at the Stockholm Institute for Transition Economics (SITE).
• Chloé Le Coq: Professor at the University Paris-Panthéon-Assas (CRED); Research fellow at the Stockholm Institute for Transition Economics (SITE); DIW Berlin.

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