Putin defiant after US sanctions on oil firms

Russia pressured to halt war in Ukraine

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Russian President Vladimir Putin delivers a speech at the Bolshoi Theatre in Moscow on Oct 17.

(REUTERS)

Russian President Vladimir Putin remained defiant on Thursday after US President Donald Trump hit Russia's two biggest oil companies with sanctions to pressure the Kremlin leader to end the war in Ukraine, a move that pushed global oil prices up 5%.

The US sanctions prompted Chinese state oil majors to suspend Russian oil purchases in the short term, trade sources told Reuters. Refiners in India, the largest buyer of seaborne Russian oil, are set to sharply cut their crude imports, according to industry sources.

The sanctions target oil giants Rosneft and Lukoil, which together account for more than 5% of global oil output, and mark a dramatic U-turn by Mr Trump, who said only last week that he and Mr Putin would soon hold a summit in Budapest to try to end the war in Ukraine.

While the financial impact on Russia may be limited in the short term, the move is a powerful signal of Mr Trump's intent to squeeze Russia's finances and force the Kremlin towards a peace deal in its invasion of Ukraine.