US sanctions on big Russian oil firms are having their intended effect, Treasury official says

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WASHINGTON (AP) — The Trump administration said it is seeing signs that its sanctions on major Russian oil producers are crimping the economic engine that has allowed Moscow to continue to fund its war in Ukraine.

Prices for Russian oil have plunged as major Indian and Chinese buyers moved to comply with the sanctions before the Friday deadline for companies and banks to wind down business with Russian oil giants Rosneft and Lukoil, a senior Treasury Department official told reporters on a briefing call. The official spoke on condition of anonymity to describe private conversations between the department and foreign buyers.

The official said the buyers have said they planned to cancel, pause or seek ways out of their forward purchases of Russian oil because of the sanctions announced in October.

The United States is promoting the penalties as President Donald Trump's envoy, Steve Witkoff, is trying to advance a plan aimed at ending the war. The plan calls for major concessions from Ukraine’s leadership on territory and weaponry, but it was not immediately clear what, if any, concessions have been asked of Russia.

The sanctions were intended to force Russian President Vladimir Putin to the negotiating table and bring an end to the war that began when Russia invaded in February 2022. U.S. officials on Thursday pointed to the price of key grades of Russian oil now selling at multiyear lows, citing publicly available data.

Officials also said they have seen significant outreach from foreign governments and the private sector for guidance on how best to sever their ties to Rosneft and Lukoil.

Ukraine's president, Volodymyr Zelenskyy, and bipartisan lawmakers had for months pressured Trump to impose harsher sanctions on Russia's oil industry.

Trump’s efforts to end the war have failed to gain traction. The Republican president has expressed frustration with Putin’s refusal to budge from his conditions for a settlement after Ukraine offered a ceasefire and direct peace talks.