Trump sanctions Russian oil companies as his efforts to end Ukraine war falter

Amna Nawaz:

President Trump tonight took a step that he has not yet taken in this second term, imposing major new sanctions on Russia.

Geoff Bennett:

The Treasury Department announced the sanctions on Russia's two largest oil companies, accusing Russia of not taking President Trump's pursuit of peace in Ukraine seriously.

Our Nick Schifrin is following this breaking news and joins us now.

OK, Nick, so what are these sanctions?

Nick Schifrin:

So, Geoff, the — they target Russia's largest oil companies, that is Rosneft and Lukoil.

And the reason that that's significant is that oil and gas is Russia's largest single revenue source, basically the backbone of Russia's economy. So, less revenue presumably means less money to go into the war machine to attack Ukraine, which is why Ukraine and its allies have been asking the U.S. and Europe to actually take this step for many years, in fact.

The sanctions will make it harder for banks to do business with Rosneft and Lukoil and harder for insurers to cover any transactions that involve those companies. And that means fewer Russian energy exports. It also could mean that Russia will have to lower the price of its oil and gas exports, therefore lowering revenue even further.

The Biden administration declined to take this step because it was worried about the effect of gas prices here in the U.S., but, today, gas prices are the lowest level that's been in years.

All of the experts, Geoff, I speak to you tonight say the administration could have taken an even more dramatic step on this, but they called this a major step because, again, as you said at the top, this is the first time in this term that Trump has proven that he is willing to impose major new sanctions on Russia.

Geoff Bennett:

And that raises the question, why now?

Nick Schifrin:

Right. And the answer to that, I think, is as important as any actual financial impact on revenue in Russia, because the political statement behind this announcement tonight is very clear.

The Treasury Department saying it was imposing sanctions — quote — "as a result of Russia's lack of serious commitment to a peace process to end the war in Ukraine." It comes just a few days after President Trump met with Ukrainian President Volodymyr Zelenskyy in the Oval Office, a meeting in which Trump refused to provide long-range weapons and seemed to pressure Zelenskyy into territorial concessions.

But with this announcement, Trump is taking that first step to impose sanctions on Russia, as he said in the Oval Office this afternoon.

Donald Trump, President of the United States: Today is a very big day in terms of what we're doing. Look, these are tremendous sanctions. These are very big. Those are against their two big oil companies. I think they want peace. I think they both want peace at this point. It's been — it's almost four years. You're going into four years.

And if I were president, it never would have started. But, yes, it's time.

Nick Schifrin:

It is time. It's certainly time for Ukraine, Geoff. Russia's bombardment continued today around the country, including a strike that you see right there on a kindergarten in Kharkiv.

Geoff Bennett:

And, Nick, you have new information tonight about Ukraine's ability to strike inside Russia? Bring us up to speed.

Nick Schifrin:

So the Trump administration in the last few months has imposed restrictions on the use of Western weapons. That's U.S., but also British and French weapons that Ukraine has used in the past to fire into Russia.

And the reason that the U.S. has influenced over those British and French weapons is that the U.S. provides intelligence that those British and French weapons need in order for Ukraine to target oil facilities, gas facilities in Russia. And the U.S. official confirms a report first in The Wall Street Journal this afternoon that the Trump administration has lifted restrictions so that that intelligence can go to Ukraine, so Ukraine can use those British weapons, as they did just yesterday to fire at targets inside Russia.

Geoff Bennett:

Nick Schifrin, our thanks to you for this late-breaking reporting. We appreciate it.

Nick Schifrin:

Thank you.