‘War Monger’ Putin: Trump Slaps Sanctions on Two Major Russian Oil Giants

The complex web of Western Russia sanctions is tightening its grip on Moscow’s state finances, with fossil fuel revenues plummeting to their lowest point since the 2022 invasion.

However, this apparent success masks deep fractures within the G7 coalition, as divergent price caps and Russia’s persistent “shadow fleet” operations in October 2025 challenge the long-term effectiveness of the economic blockade.

Key Facts & Quick Take

• Revenue Plummets: Russia’s monthly fossil fuel export revenues fell to €546 million per day in September 2025, the lowest level since the full-scale invasion of Ukraine began.
• Budget Deficit Widens: Driven by a 20% year-on-year drop in petroleum export revenues for the first nine months of 2025, Russia’s federal budget deficit is now projected to reach 3.5-4% of GDP this year.
• G7 Cap Fractures: The G7 price cap coalition is no longer unified. In Summer 2025, the EU and UK lowered their cap on Russian crude to $47.60 per barrel, while the United States has maintained the original $60 per barrel cap.
• Refining Crippled: Persistent Ukrainian drone attacks on Russian energy infrastructure have successfully cut the country’s crude oil processing by an estimated 500,000 barrels per day (bpd), leading to domestic fuel shortages and a sharp drop in diesel and jet fuel exports.
• Shadow Fleet Dominates: Russia’s “shadow fleet” of uninsured and anonymously-owned tankers transported 69% of its crude oil in September 2025. However, the share of G7-owned or insured tankers has risen to 55% for all oil exports, up from 36% in January, indicating partial compliance with the cap.

From 2017’s ‘Technical Easing’ to All-Out Economic War

The current, full-scale economic war footing stands in stark contrast to the earlier, more targeted sanctions regime. The user-provided link to a 2017 article, which ostensibly discusses sanctions on Russian oil companies, actually refers to a minor but controversial policy tweak from that era.

On February 2, 2017, the Trump administration’s Treasury Department issued a general license that modified sanctions against Russia’s Federal Security Service (FSB). This was not a broad easing for oil giants but a specific carve-out to allow U.S. companies, such as Microsoft and Intel, to pay the FSB for licenses and permits required to import and sell technology products in Russia.

At the time, organizations like the American Chamber of Commerce in Russia, whose board included executives from firms like ExxonMobil, had lobbied for such technical corrections. They argued the original sanctions, imposed after the 2014 annexation of Crimea, were so hastily drawn that they unintentionally barred U.S. firms from routine (and legal) business.

Today, that 2017 debate over IT permits seems like a relic from another geological epoch. The post-2022 Russia sanctions are not technical; they are a deliberate, coalition-wide attempt to cripple Russia’s primary revenue stream: energy exports.

The Fractured Price Cap: G7 Allies Diverge

The cornerstone of this effort has been the G7’s price cap, a novel mechanism designed to keep Russian oil flowing to global markets (preventing a price spike) while simultaneously crushing the profits sent back to the Kremlin.

The policy, which prohibits Western companies from providing shipping, finance, or insurance for Russian oil sold above the cap, was initially set at $60 per barrel in December 2022. For a time, it worked. But in 2025, that unity has crumbled.

According to an August 2025 analysis from the Center for European Policy Analysis (CEPA), the EU and the UK moved to tighten the screws, lowering their cap to $47.60 per barrel. This move was designed to bring the cap more in line with Russia’s production costs, maximizing the economic pain.

Critically, the United States did not follow suit. As of October 2025, the U.S. continues to adhere to the original $60 cap. This divergence creates a significant enforcement loophole. Russian exporters can simply prioritize using services from U.S.-aligned jurisdictions to sell oil at prices up to $59.99, bypassing the stricter EU/UK limit.

By the Numbers: Russia’s Revenue Slump (Latest 2025 Data)

Despite the fractured cap, a combination of factors has converged to deal a severe blow to Russia’s finances.

1. The State of Russia’s Budget (September 2025)

The most recent data paints a bleak picture for the Russian Finance Ministry. Revenues from oil and gas are down 26% year-on-year as of September 2025. This has been the primary driver of Russia’s ballooning budget deficit, which is now forecast to reach 3.5-4% of its GDP by year’s end, forcing the Kremlin to increasingly tap its National Wealth Fund to cover shortfalls.

2. Urals vs. Brent: The Price Is Right (for Sanctions)

For most of 2025, Russia’s flagship Urals crude grade has been trading consistently below the original $60 price cap. In its October 2025 Oil Market Report, the International Energy Agency (IEA) noted that benchmark ICE Brent futures were trading at a relatively low $64 per barrel.

Market analysts report that Urals crude is trading at an even steeper discount, fetching less than $56 per barrel in many markets as of mid-October 2025. This indicates that while the enforcement of the cap is patchy, global price realities and slowing demand growth are achieving the cap’s goals by default.

3. The ‘Shadow Fleet’ vs. G7 Shipping

Russia’s primary tool for evading the cap has been its “shadow fleet”—a sprawling armada of aging, anonymously-owned tankers operating without Western insurance. In September 2025, this fleet was responsible for moving 69% of Russian crude oil.

However, data from the Centre for Research on Energy and Clean Air (CREA) shows a surprising counter-trend. The share of all Russian oil exports (including refined products) transported on tankers owned or insured by G7+ countries has risen significantly in 2025, from 36% in January to 55% in July.

This suggests that with Urals prices trading below the $60 U.S. cap, many shippers are finding it profitable and legal to re-enter the market, attesting that their cargo is compliant. This simultaneously legitimizes the trade while still limiting Russia’s maximum potential profit to the cap’s ceiling.

Official Responses & Expert Analysis

When the price cap was first implemented in 2022, European Commission President Ursula von der Leyen framed it as a tool of stability. “The G7 and all EU Member States have taken a decision that will hit Russia’s revenues even harder… It will also help us to stabilise global energy prices,” she said.

In 2025, that dual mandate remains, but the focus has shifted. The most significant “official” analysis now comes from the IEA. Its October 2025 Oil Market Report highlights a new, powerful factor beyond the price cap: Ukraine’s campaign against Russian refineries.

The IEA estimates that these attacks have “cut Russian crude processing by an estimated 500 kb/d.”

This has had two major consequences:

1. Domestic Shortages: Russia is facing its own shortages of fuel, particularly for its agricultural sector and military.
2. Global Price Shocks: The drop in Russian exports of middle distillates (like diesel and jet fuel) has “reverberated globally,” causing prices for these specific products to rise even as crude oil prices fall.

Impact and What to Watch Next

The pivot to Asia, primarily India and China, remains Russia’s economic lifeline. India is now the single largest buyer of Russian seaborne crude, importing an average of 1.9 million barrels per day in 2025. These buyers, who do not adhere to the price cap, are nonetheless able to demand significant discounts from Moscow, leveraging its lack of other customers.

Looking ahead, two factors will dominate. First is the upcoming EU ban on the import of refined products derived from Russian crude, set to take effect at the start of 2026. This could disrupt global trade flows, particularly from refineries in India and the Middle East that currently process Russian crude and sell it to Europe.

The second, and most critical, factor is the political will of the G7. The divergence between the U.S. $60 cap and the EU/UK $47.60 cap cannot last if the coalition hopes to maximize pressure. Any further reduction in global oil prices, as forecast by the U.S. Energy Information Administration (EIA), will put the $47.60 cap to the test, while the $60 cap risks becoming economically irrelevant.