The UK announced new, broad penalties on Wednesday that would affect Russia’s two biggest oil companies, Lukoil and Rosneft, as well as 44 other tankers in the shadow fleet. The measure is part of Britain’s stronger efforts to impose energy restrictions and limit the Kremlin’s income, which it uses to pay for its war in Ukraine.
The UK is also putting additional pressure on corporations in foreign nations, such as India and China, which are important trading partners, to stop helping with the Russian oil trade.
Sanctions aimed at Russia’s big oil companies
The UK government said that Lukoil and Rosneft were punished because they helped the Russian government in a strategic way. The companies are now subject to British law:
A freeze on assets.
Disqualification of the director.
Restrictions on transportation.
No British trust services.
British officials said that the Kremlin needed the two enterprises for strategic reasons, pointing out their economic importance and how they help the government pay for military actions in Kyiv. Rachel Reeves, the Minister of Finance, said that “there is no place for Russia in global markets” and that Britain will do everything it could to deter Moscow from paying for its war.
The new sanctions package affects 51 ships, including shadow navy vessels and seven liquefied natural gas (LNG) tankers. It also affects people and businesses in the energy and defense sectors. The sanctions also affect the Chinese Beihai LNG terminal, which gets cargo from the Russian Arctic LNG2 project, which is also under sanctions.
The “Shadow Fleet” and Other Problems
A major target is the shadow fleet, a group of outdated tankers that are said to be used to sneak under sanctions on Russian oil. However, merchants who know a lot about Russian oil sales say that the British sanctions could have the opposite impact and make it harder for Russia to get Western ships and insurance. This could mean that more Russian oil commerce goes to the shadow fleet, which uses services from countries other than the West.
Experts think that the shadow fleet now has more than 1,500 ships, which makes ships plentiful. However, historical reports say that some Indian and Chinese ports have turned away these unsanctioned tankers, making it harder for Russia to trade.
Punishing an Indian Refinery
Nayara, a Russian-owned refinery in Mumbai, India, is one of the sanctioned companies. Rosneft owns the most shares in Nayara. The European Union has already put penalties on Nayara, and Nayara has spoken out against them.
The UK is putting further pressure on India and China. Minister Rachel Reeves explicitly called out big importers, saying, “At the same time, we are ramping up pressure on companies in third countries, including India and China, that continue to facilitate getting Russia oil onto global markets.”
This initiative to put more pressure on India comes just days after UK Prime Minister Keir Starmer’s first official visit to the country. There, he met with Prime Minister Narendra Modi and reaffirmed the two countries’ ties, including concluding many trade deals.
India’s Point of View and Trump’s Claims
The sanctions and the pressure that came with them brought India’s energy sourcing policies back into the news. India has always said that its foreign policy choices, including where to get energy, are based on “what is on offer in markets and the current global situation” and “national security imperatives and strategic assessments.” New Delhi has said that its “time-tested” cooperation with Moscow should not be seen through the “prism of a third nation.”
The UK made their announcement right after former US President Donald Trump made a big assertion on Wednesday. Trump said that PM Modi had “assured” him that India would stop buying oil from Russia.
“I didn’t like that India was buying oil.” And he (Modi) told me today that they won’t be buying oil from Russia. Trump said, “That’s a big stop,” and that the shift will happen “within a short period of time.” Trump has already put tariffs on India, saying it was because of New Delhi’s imports of Russian oil. The Indian Ministry of External Affairs has said that US officials’ earlier comments on India’s energy links with Russia are not true.
Russia’s Response
The Russian embassy in London promptly rejected the UK’s new sanctions, saying they will backfire by making the global energy markets less stable and raising costs for British firms and consumers. The embassy said in a statement, “Despite what British leaders have said loudly, these restrictions will not change the course of Russian foreign policy.”