US sanctions Rosneft & Lukoil: What we know of 2 oil giants that produce half of Russia’s crude

Rosneft, the Russian state-owned oil behemoth, has large interests in India. Reliance has a contract to purchase 500,000 barrels of crude per day from the firm.

Representational image of a Rosneft petrol station in Moscow | Commons

New Delhi: US President Donald J. Trump’s administration on Wednesday issued the first round of sanctions targeting Russia since the American President assumed power at the White House for a second term this January.

Targeting two of the largest Russian oil companies—Rosneft and Lukoil—the sanctions are a statement of intent by Trump. The US President aims to curb the flow of oil, in a marked change of policy from his predecessor Joseph R. Biden Jr. While Biden had focused on curbing revenues of Russian oil majors, Trump’s move to restrict flow could potentially disrupt global energy markets.

Rosneft and Lukoil jointly account for nearly half of Russia’s crude oil exports, according to Bloomberg. The two along with state-owned energy company Gazprom are reportedly the largest companies by revenue in Russia.

Trump’s decision, announced overnight, is also a reflection of his frustration with Russian President Vladimir Putin, with whom talks to discuss an end to the Ukraine war have been inconclusive.

In addition, the continued purchase of Russian oil by Indian refiners has particularly prickled Trump. India, according to data published by analytics firm Kpler and quoted by Bloomberg, imported roughly 36 per cent of its oil from Russia.

The sanctions are set to affect a number of Indian state refiners, which get their crude supplies from both Rosneft and Lukoil.

Rosneft & Lukoil

Rosneft, a state-owned enterprise, has been led by Igor Sechin, who is considered to be close to President Putin, since 2012.

Founded in 1993, Rosneft’s core assets were established in the erstwhile USSR. The company, according to its website, was entrusted with the country’s oil and gas assets in privatisation drives introduced after the fall of Soviet Union.

At the end of 1995, total production of hydrocarbons by Rosneft stood at roughly 12.7 million tonnes. In the three decades since, it grew to occupy roughly 40 per cent share in Russia’s total oil production, according to the company’s own estimate.

Rosneft’s 2024 annual report indicated that the company produced 5.4 millions of barrels of oil equivalent (MMboe) per day, far surpassing firms such as PetroChina or ExxonMobil.
Its total production of hydrocarbons last year stood at 255.9 million tonnes of oil equivalent (MMtoe). Of this, liquid hydrocarbons, which include crude oil, accounted for 184 mmt, while gas stood at 87.5 billion cubic metres (roughly 1.5 mmboe per day).

The company is also Russia’s largest taxpayer, paying about 6.1 trillion rubles in taxes last year.

Rosneft’s global profile has a key Indian connection—Nayara Energy.

Nayara, which runs the Vadinar refinery in Gujarat, was recently sanctioned by the UK and the European Union. According to estimates by UK authorities, Nayara imported roughly $5 billion worth of crude from Rosneft in 2024.

India imported approximately $56 billion worth of crude from Russia in the 2024-2025 financial year, according to the Ministry of Commerce and Industry. Around 10 per cent of the total dollar value of imports was solely bought by Nayara, UK authorities believe.

Indian conglomerate Reliance also has a deal with Rosneft to purchase 500,000 barrels of oil per day. But reports say Reliance is set to halt Russian purchases by 21 November, when sanctions will take effect.

Lukoil, the other firm hit by US sanctions, is one of the largest privately owned firms in Russia.

In the last publicly available data published by the firm, its total revenue in 2021 stood at 9.4 trillion rubles. It produced 2.1 mmboe of hydrocarbons per day that year, and the share of liquid hydrocarbons was 1.64 million barrels of oil per day.

According to Reuters, Lukoil’s total production of oil and gas condensate in 2024 scaled 80.4 million tonnes.

The firm is also developing the West Qurna-2 oil field in Iraq, expected to be one of the largest in the world, and has 75 per cent stake in the project.

India-Russia oil trade

India was not a large importer of Russian crude until 2022.

In the financial year before the Covid-19 pandemic, 2019-2020, the value of India’s purchase of Russian crude was $3.1 billion. This rose to roughly $5.2 billion in 2021-22.
The seismic shift began after Moscow launched its full-scale war with Ukraine in February 2022. The then American administration led by Biden focused on stabilising energy markets while also curbing Russia’s revenues from its crude sales. G7 nations imposed a price cap on oil, ensuring that Russian crude would be sold globally at less than $60 a barrel.

The incentive was crafted keeping India in mind, according to former American ambassador to India Eric Garcetti.

In the first year of the war (2022-2023), India’s crude imports from Russia grew to $38.8 billion, a 639 per cent increase. The year after, crude imports went up to $54 billion before touching $56 billion last FY.

India’s dependence on Russian energy is directly linked to the price cap and the Ukraine war—also reasons why Trump wants New Delhi to shift to American suppliers. The latest sanctions, which may prompt further US action against those still maintaining ties with Rosneft and Lukoil, are set to push that shift towards alternative sources.

(Edited by Prerna Madan)