Putin defiant over war despite conceding ‘unfriendly’ US oil sanctions will hurt Russia

The additional US sanctions imposed on Russia’s two largest oil companies earlier this week are likely to have “certain consequences” on the country’s economy, Vladimir Putin told reporters on Thursday, while also pledging that Moscow would not bow to foreign pressure to end its war in Ukraine.

Speaking to the press from the Kremlin, Putin called Washington’s measures against Rosneft and Lukoil — which together account for almost half of Russia’s total crude oil exports — an “unfriendly act” which would “not strengthen Russian-American relations”, which he said had “only just begun to recover”.

While the Russian leader insisted the sanctions introduced by the Trump administration on Wednesday — the first since Trump returned to office in January — were “nothing new” and would not “significantly affect economic well-being”, he nevertheless acknowledged that they were “serious” and would result in “certain losses”.

Washington’s sanctions caused global oil prices to jump by around 5% on Thursday and led Chinese state oil companies to suspend their imports of seaborne Russian oil, with Indian refineries also expected to drastically reduce their purchases from Moscow to comply with the sanctions.

“This is, of course, an attempt to put pressure on Russia”, Putin said. “But no self-respecting country and no self-respecting people ever make decisions under pressure”.

He also threatened a “very serious, if not overwhelming” response from Moscow should Russia be attacked with the long-range Tomahawk missiles that Trump has so far refused to grant Ukraine and insisted that Trump had postponed, rather than cancelled, an anticipated summit between the two leaders in Budapest.

“Dialogue is always better than confrontation, than disputes, or especially war”, Putin said of his meeting with Trump. “That is why we have always supported the continuation of dialogue, and we support it now”.

The Wall Street Journal (WSJ) reported on Wednesday that US sanctions on Russia’s oil industry had been “drafted and ready for months in case Trump decided to act”. 

The US president had been presented with three sanctions plans, the WSJ reported, including a “severe” option targeting Russian industry and senior Kremlin officials and a “lighter option that included more limited sanctions”, ultimately opting for the “middle” option once it became apparent that a breakthrough on a peace deal for Ukraine was unlikely.

The imposition of fresh US sanctions is likely to further deepen the ongoing crisis in Russia’s energy sector, which provides the Kremlin with its single largest source of funding for its war effort in Ukraine.

Last month, Novaya Europe found that Ukrainian drone strikes have disabled at least one sixth of Russia’s oil refining capacity since early August, with Western sanctions delaying repairs to damaged facilities and causing fuel prices to rise for domestic customers.