Crippling the Kremlin with Russian Sanctions

Peter Zeihan 6 min

The sanctions on Rosneft and Lukoil will cripple the Kremlin because they cannot operate their own assets. This marks the first time this administration has shown awareness of political and economic realities on the ground.

  • Donald Trump

Chapters

  1. 0:00

    The Sanctions on Russian Energy

    The Trump administration has imposed punitive tariffs on Rosneft and Lukoil, effectively cutting them off from the U.S. dollar and global finance.

  2. 0:39

    Hungary's Temporary Exemption

    Hungary secured a 12-month exemption from sanctions for Russian oil, but this is temporary as alternative routes through Slovakia and Croatia will soon replace the blocked flow.

  3. 2:28

    The Failure of Lukoil's Swiss Plan

    Lukoil planned to sell assets to a Swiss trading company, but the Treasury Department opposes the sale because the company was originally set up as a front for the Kremlin.

  4. 4:19

    Rosneft's Technical Incompetence

    Rosneft is technically incompetent and relies on foreign partners for complex projects like Sakhalin, which will likely shut down because the Russians cannot operate them themselves.

Key points

  • 0:00

    Over 99.9% of international crude is exchanged in the U.S. dollar.

  • 0:39

    Hungary secured a temporary exemption to continue using Russian oil.

  • 0:39

    Alternative infrastructure through Slovakia and Croatia will replace blocked routes.

  • 2:28

    The Swiss trading company Govnor was originally set up by a Russian affiliate of Lukoil.

  • 2:28

    The Treasury Department opposes the sale of Lukoil assets to Govnor.

  • 4:19

    Rosneft expanded by absorbing assets from companies that fell afoul of the Kremlin.

  • 4:19

    Rosneft cannot operate the Sakhalin project without foreign partners.

  • 4:19

    The Sakhalin project is the single largest dollar item of foreign investment into Russia ever.

Who and where

People · 1

  • Drawing of Donald Trump

    Donald Trump 2

    President of the United States (2017–2021; since 2025)

    Photo 1

1. Photo: Daniel Torok, Public domain, via Wikimedia Commons · Wikidata · redrawn in our house style (Donald Trump)

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