Vladimir Putin has said Russia will never bow to US pressure but conceded that new sanctions could cause some economic pain, as reports emerged that China and India are scaling back Russian oil imports after Washington targeted Moscow's two largest producers.
The US imposed sanctions on Rosneft and Lukoil, which together account for just under half of Russia's crude exports, along with nearly three dozen of their subsidiaries. The measures are aimed at choking off oil revenues that fund the Kremlin's war effort in Ukraine. The EU separately agreed to a phased ban on Russian liquefied natural gas and added two Chinese oil refiners to its sanctions list.
Speaking to Russian journalists, Putin described the US sanctions as an “unfriendly act” and an attempt to pressure Russia, which he said was futile. However, he acknowledged that “some losses are expected” from the measures. Putin also warned that sanctions would lead to higher oil prices and suggested US President Donald Trump should consider who his advisers are really working for.
Early signs indicate that Russia's two biggest energy customers are suspending imports in response. India's largest buyer of Russian oil, Reliance Industries, hinted it may scale back or temporarily halt purchases. Sources said China's state-owned oil companies have suspended purchases of seaborne Russian crude, at least in the short term, amid concerns about breaching the new sanctions.
The oil and gas sector accounts for roughly a fifth of Russia's GDP. A sudden fall in demand from China and India would be a devastating blow to Kremlin revenues while pushing global prices higher. Both countries have previously dismissed Western pressure to curb Russian energy imports as empty threats.
