President Donald Trump’s sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, have sent shockwaves through global energy markets. By cutting off Moscow’s access to U.S. financial systems, President Trump hopes that these measures will impede Russia’s war-financing in response to their invasion of Ukraine. Their effectiveness ultimately lies with how oil importers such as China and India respond.

Sanctions Target Rosneft and Lukoil

U.S. sanctions announced on October 22, 2025 are among the harshest ever seen, effectively barring Rosneft and Lukoil from conducting transactions within U.S. financial institutions, effectively cutting them off from accessing global banking systems using dollars as currency. Both of these companies play key roles in Russia’s economy; collectively accounting for over five percent of global oil output while Rosneft alone accounts for approximately 10% of Russia’s federal revenues according to analysts at The Washington Post.
China Takes A Strategic Pause To Respond

Following the sanctions, China’s state-owned oil giants–PetroChina, Sinopec and CNOOC–suspended purchases of seaborne Russian oil for fear of secondary sanctions and to avoid dealing with entities subject to sanctions, according to Reuters. This decision may also have been driven by concerns over complex transactions conducted with sanctioned entities (Reuters).
China’s pipeline imports from Russia remain intact, but its suspension of seaborne oil purchases signifies a substantial change to its energy strategy.

China has long shown itself adept at bypassing sanctions through various means, including using intermediaries and alternative payment systems, so its suspension may not be permanent if China finds ways to mitigate their impact. Accordingly, RadioFreeEurope/RadioLiberty reports.
India Shifts to Meet U.S. Pressure

India, once an eager importer of discounted Russian oil, appears set to significantly cut back its purchases. Refiners have stopped placing new orders while waiting for clarification regarding compliance with U.S. sanctions.
This development coincides with President Trump’s statement that Prime Minister Narendra Modi assured him India would cease purchasing Russian oil–an important diplomatic breakthrough, according to Politico.
India’s import reduction is being driven in part by secondary sanctions that threaten steep tariffs on Indian exports to the U.S. if India engages in Russian oil trade, according to Reuters.
Economic pressure combined with a desire to deepen U.S.-India relations has caused the United States and India to reconsider energy sourcing options.

Global Implications
China and India–two of the world’s biggest oil importers–could significantly alter Russia’s revenues as their reduced demand could force Russia to offer deeper discounts to attract buyers, potentially destabilizing global oil markets.
Atlantic Council
However, Russia should not be underestimated when it comes to adapting. Russia has already demonstrated resilience by redirecting oil exports towards alternative markets. The success of U.S. sanctions depends upon their implementation as well as whether other nations follow suit by reducing their dependence on Russian energy sources.

President Trump’s sanctions represent an ambitious attempt to undermine Russia’s economy during its ongoing conflict in Ukraine. Their success depends on China and India embracing these measures; should they do, Russia could experience serious economic difficulties; however, if these nations find ways around them instead of adhering, Moscow could continue generating revenues necessary for military operations and remain financially independent. It will be fascinating to watch in how far these sanctions impact both its economy and ability to finance war efforts over time.