UK sanctions Rosneft, Lukoil and shadow fleet tankers for Russian oil trades

The UK has sanctioned Rosneft and Lukoil -- the two largest Russian oil companies -- as well as 44 oil tankers in efforts to undermine Russia's war chest against Ukraine, the government said Oct. 15.

Elsewhere on Russia's oil supply chain, the UK has also sanctioned refiners in China and India -- the top two Russian oil importers -- for the first time, as well as some Chinese ports.

"We are sending a clear signal: Russian oil is off the market," UK Chancellor Rachel Reeves said.

Lukoil and Rosneft did not immediately respond to emailed requests for comment.

The sweeping sanctions package aims to disrupt the operations of the Russian companies, which export 3.1 million b/d of Russian oil, according to a government statement.

Rosneft alone accounts for nearly half of all Russian oil production and approximately 6% of global output, according to the government.

The 44 tankers are part of Russia's shadow fleet established to circumvent Western sanctions, the UK said.

S&P Global Commodities at Sea data shows the ships loaded 89.1 million barrels of crude and refined products from Russian ports between January and September, or 327,000 b/d.

Indian refiner Nayara Energy, Chinese refiner Shandong Yulong Petrochemical, and some Chinese ports in Shandong were also sanctioned this time for their contributions to Russia's oil revenues, according to the statement.

Western governments have been increasingly targeting Chinese and Indian importers to undermine Russia's oil sales in recent quarters. The EU earlier sanctioned Nayara because it was 49% owned by Rosneft, while the US sanctioned some Chinese terminals and independent refiners for their Iranian crude imports -- but those are also often on the receiving end of Russian oil.

Product ban

According to the government, the UK will also ban imports of oil products refined in third countries from Russian-origin crude oil, following a similar step taken by the EU.

The UK has yet to announce when the ban will take effect. The EU ban will come into force on Jan. 21, 2026.

China and India have exported 39,000 b/d of clean products to the UK so far this year, or 8% of the country's total, according to CAS. Most of those are jet fuel.

Beyond oil, the UK has also targeted Russia's growing LNG sector, which the Kremlin has been developing to offset declining oil revenues.

Eight specialized LNG tankers were sanctioned, along with the Chinese Beihai LNG terminal, which has been importing LNG from the Arctic LNG 2 project -- a flagship Russian development that was sanctioned by the UK in February 2024.

The sanctions also extend to companies supplying electronics critical for Russian drones and missiles across several countries, including Thailand, Singapore, Turkey, and China, in an effort to disrupt Russia's military supply chains.