While the United States works toward a "peaceful resolution to the war," the Treasury said in a news release that the sanctions are designed to "increase pressure on Russia's energy sector and degrade the Kremlin's ability to raise revenue for its war machine and support its weakened economy."
"Now is the time to stop the killing and for an immediate cease-fire," Treasury Secretary Scott Bessent said in a statement about the stalled negotiations that include European partners.
"Given President Putin's refusal to end this senseless war, Treasury is sanctioning Russia's two largest oil companies that fund the Kremlin's war machine. Treasury is prepared to take further action if necessary to support President Trump's effort to end yet another war. We encourage our allies to join us in and adhere to these sanctions."
Extensive sanctions were imposed after Russia's full-scale invasion of neighboring Ukraine in February 2022. Initially, they were imposed in March 2014 after Russia annexed Crimea.
This time, sanctions by the Office of Foreign Assets Control are targeting Russia's two largest oil companies: Open Joint Stock Company Rosneft Oil Company and Lukoil OAO.
The United States earlier blocked petroleum, aluminum, copper and nickel from Russia. The Trump administration is attempting to use tariffs to halt third-country access, including by India.
Russia has been the world's third-largest oil exporter, generating $122 billion in 2023.
Nayara Energy, an Indian company backed by Rosneft, exported $135 million of oil refined from Russian crude to the United States, including $192 million from its Vadinar refinery in India between January 2024 and the end of January, Newsweek reported in March.
OFAC also designated 34 Russia-based Rosneft or Lukoil subsidiaries. Nayara Energy wasn't sanctioned.
Rosneft specializes in the exploration, extraction, production, refining, transport and sale of petroleum, natural gas and petroleum products. Lukoil is involved in the exploration, production, refining, marketing and distribution of oil and gas in Russia and internationally.
"All property and interests in property of the designated or blocked persons ... that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. "In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 5% or more by one or more blocked persons are also blocked."
Violations of U.S. sanctions may result in civil or criminal penalties on U.S. and foreign persons, the agency said.
Hours before the Treasury announcement, Bessent told reporters outside the White House: "We are going to either announce after the close this afternoon or first thing tomorrow morning a substantial pickup in Russia sanctions."
Sanctions had blocked numerous Russian financial institutions, including Sberbank, VTB Bank and Gazprombank, from doing business in the United States. Also, the Treasury has sanctioned major components of Russia's financial infrastructure, including the Moscow Exchange, the National Clearing Center and the National Settlement Depository.
Republican Sen. Lindsey Graham of South Carolina has introduced new sanctions on Russia, but his party is waiting to hear from the White House to bring the bill up for a vote.
The State Department helps formulate and authorize sanctions.
"We'd still like to meet with the Russians," Secretary of State Marco Rubio told reporters Wednesday night before departing for Israel. "I had a good call with Foreign Minister [Sergey] Lavrov and we'll follow up on that. We're always going to be interested in engaging if there's an opportunity to achieve peace."
Olga Stefanishyna, who is Ukraine's ambassador to the United States, posted on X: "This step comes after numerous attempts to give Russia a chance to begin real negotiations to end the war. The decision is fully aligned with Ukraine's consistent position: peace is possible only through strength and pressure on the aggressor using all available international tools."
NATO Secretary General Mark Rutte met with U.S. President Donald Trump in the White House before the sanctions were announced.
He told CNN's Jake Tapper afterward: "You can change Putin's calculus. You can change his way, how he wants to end the war. And I think what we discussed today and the president and I are in complete agreement on this, sustained pressure is needed."
On Tuesday, Trump said he is holding off on plans to meet with Russian President Vladimir Putin in Budapest, Hungary, in "two weeks or so" because it would be a "waste of time" with Russia opposed to an immediate cease-fire.
Trump, during his 2024 presidential campaign, said he would end the war in Ukraine before he even took office. But now he said the task is more difficult than expected.
Trump has flip-flopped on Ukraine's chances to halt Russia. In late September, he said Ukraine could win back all of its territory after meeting Ukrainian President Volodymyr Zelensky on the sidelines of the United Nations General Assembly in New York. Previously, Trump has insisted that Ukraine give up land to Russia as part of any peace deal.
Russia is estimated to control about 20% of Ukraine's territory.
Trump and Zelenskyy met in the Oval Office on Friday, their third meeting since Trump returned to office in January. Trump declined to provide Ukraine with the long-range Tomahawk missiles to prevent an escalation of the war after initially it was possible to send them.
Trump spoke on the phone with Putin the day before.
The president told the warring leaders that "it is time to stop the killing and make a deal," in a Truth Social post after the meeting.
"Enough blood has been shed, with property lines being defined by war and guts," he said.
"No more shooting, no more death, no more vast and unsustainable sums of money spent."
Zelensky said Putin fears Ukraine obtaining Tomahawk missiles, but Zelensky is "realistic" about the situation.
Putin said that Tomahawks would weaken the already strained relations between Russia and the United States.
Overnight Tuesday, Russia launched another round of attacks from drones and miles on Ukraine, killing six people, including two children.
The attack was after Ukraine used British-provided long-range Storm Shadow missiles to strike a chemical plant in Russia's Bryansk region, around 62 miles from the border with Ukraine.
The Wall Street Journal reported that Russia's strikes were the result of a decision by the Trump administration to lift restrictions on long-range strikes.
Trump decried The Journal's report on Truth Social, calling it "FAKE NEWS! The U.S. has nothing to do with those missiles, wherever they may come from, or what Ukraine does with them."
Ukraine, with a population of 3.79 million, broke off from the Soviet Union, which includes Russia, after a declaration of independence on Aug. 24, 1991.
Zelensky became president in May 2019.
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