WASHINGTON : The Treasury Department’s Office of Foreign Assets Control (OFAC) said its early assessment of sanctions imposed on October 22 shows they are “having the intended effect of reducing Russian revenues by lowering the price of Russian oil and thus Moscow’s ability to finance its war effort against Ukraine.” The move marks one of Washington’s toughest economic actions since Russia’s full-scale invasion in February 2022, and the first direct sanctions signed by President Donald Trump since taking office in January.

The sanctions order companies to end all dealings with Rosneft and Lukoil by November 21, warning that violators risk being cut off from the global financial system. However, questions remain over exactly how these measures will be enforced, especially since China and India remain Russia’s largest oil customers.

OFAC noted that several major grades of Russian crude are now trading at multi-year lows. Nearly a dozen major Indian and Chinese buyers have reportedly signaled plans to halt purchases of Russian oil for December shipments, indicating a swift and significant market reaction.

Data from Workspace, a subsidiary of the London Exchanges Group, showed Urals crude loaded at Novorossiysk in the Black Sea falling to $45.35 a barrel on November 12, its lowest level since March 2023. At that time, Russia was assembling its so-called “shadow fleet” of tankers to bypass the G7’s $60 per-barrel price cap imposed in December 2023.

Meanwhile, Brent crude futures hit $62.71 on November 12 and traded at $64.03 on Monday, while Urals crude futures edged up to $47.01. Loading operations at the Black Sea port have resumed after being temporarily halted due to a Ukrainian drone and missile attack.