Russia’s President Vladimir Putin has responded defiantly to the United States’ imposition of sanctions on two of the country’s major oil firms, Rosneft and Lukoil. The sanctions, announced by US President Donald Trump, aim to squeeze Moscow’s finances and pressure it to end its ongoing invasion of Ukraine, which has lasted over three years.

The targeted oil companies account for nearly half of Russia’s total crude oil exports, and the sanctions announcement led to a 5% increase in global oil prices. Putin described the move as an “unfriendly act” that would not strengthen Russian-American relations, which he claimed had only just begun to recover. The European Union has also introduced a new wave of sanctions on Russia, significantly increasing pressure on its war economy.

Speaking to journalists in Moscow, Putin vowed not to succumb to pressure from the West, as Trump put a planned meeting with the Russian leader on hold. Putin emphasized that dialogue is preferable to confrontation and warned that the sanctions could backfire on Trump by causing a spike in global oil prices. The imposition of sanctions on the oil companies is the latest development in Trump’s efforts to end the war, which have been marked by a mix of cooperation and tension.

Russia’s economy is heavily reliant on energy revenue, which enables Putin to fund the armed forces without exacerbating inflation or triggering a currency collapse. While acknowledging the seriousness of the sanctions, Putin downplayed their potential impact on the Russian economy. The US and EU sanctions are likely to have significant consequences for Russia, given the importance of oil exports to its economy. The ongoing conflict in Ukraine and the resulting economic pressure on Russia are likely to remain major international concerns in the coming weeks and months.