The Peter Zeihan Podcast Series - Crippling the Kremlin with Russian Sanctions || Peter Zeihan

Episode Date: November 18, 2025

The Trump administration's sanctions on Russia's energy sector are proving to be more substantive than the other policies we've seen.Join the Patreon here: https://www.patreon.com/PeterZeihanFull Newsletter: https://bit.ly/4nR3DGv

Hey all, Peter Zine here coming to you from Colorado. Today we're talking about the sanctions that the Trump administration has put on the Russian energy sector, most notably on Rosneft, which is the state oil monopoly, or near monopoly, and Luke Oil, which is the largest technically private company, but is really indirectly run by the state as well. A couple weeks back, the Trump administration put punitive tariffs on the two companies saying that no one can deal with them at all, and if they do, they can't deal with the United States or access to the U.S. dollar. and since all crude trade international, well, well over 99.9% of it is exchanged in the U.S. dollar. That basically means being shut off from global finance, among other things. We've had a few developments. First, a minor one with Hungary. Hungary's president, Victor Orban, who is kind of a weird cat. Anyway, he is an anti-European, anti-American, pro-Russian stooge, is the very short, and be perfectly honest, not particularly,

biased view. He's been working to sabotage sanctions on all things Russian and embargoes on all things Russian ever since the Ukraine war started. And as actually said that if the Russian troops were in Kiev, that would probably be better for Hungary because Hungary wants a piece of Ukraine as well. Anyway, he was in the White House and managed to sweet talk his way into getting an exemption from the sanctions. Hungary has been basically using and gorging upon Russian crude for the entirety of the Ukraine war and has been trading exemptions to European sanctions and tariffs and such in order to maintain access in exchange for letting the Europeans do what they want more broadly with the Ukraine question. And he was able to repeat that feat with Donald Trump this

past week. I wouldn't count on that lasting because no country that borders Hungary has a similar exception. So now that the sanctions are in place, there won't be Russian oil or natural gas flowing through Ukraine to Hungary. And even things like nuclear fire. fuel are going to have to be flown direct, but they're going to have to be flown around the war zone that is Ukraine. And if you have radioactive material in your plane, that triggers some other issues. Anyway, so the Ukrainians are saying it's a permanent exemption. The Trump administration is saying it's a 12-month exemption. The disconnect between the two is pretty typical for Trump's deals on anything. And the Hungarians are going to be squeezed out of this. It's not a real

problem. There is now alternate infrastructures that comes in through Slovakia or especially through Croatia, so they're going to be fine. So it's a temporary issue. The broader issue is that Luke Oil is actually an international company, whereas Rosneff's holdings are all domestic. And for Luke Oil, who holds assets in the United States, a lot of fuel stations or oil fields in Iraq, you're actually talking about a substantial amount of production and financially viable assets that they're going to have to now dump. Now, they were planning on selling them to a trading company based in Switzerland called Govnor. Now Govnor was, this is kind of funny. It's a shell game. Back in 2014, the first time the Russians invaded Ukraine. Govnor was set up by a Russian who was

affiliated with Luke oil. And then he immediately sold all of his shares to his Swedish partner because he knew he was going to be sanctioned. And it's been operating as an independent independent trading platform ever since. whole time it's basically been a front for the Kremlin. And so the feeling was that governor was just going to buy all the assets. The Trump administration still hasn't staffed up almost a year into its administration. And if you want to actually have a sanctions regime that is meaningful, you have to have a staff on it full time to deal with all the loopholes that will pop up, this being a big one. Well, the Treasury Department under Treasury Secretary

percent figure that all by themselves, or with some help, I don't really care how, and have already said that they oppose a sale to governor. So the assets are going to have to have to be split up on a national basis and sold more viably to get away from Russian influence, which is, you know, great. This is the first time in any sort of economic policy out of this administration that there seems to have been any awareness to some of the political and economic realities at the ground level. Normally we get a big broad tariff policy and then countries figure out how to get around it. The Chinese certainly have done that over and over and over again. But at least on this one point, the Russians have not. And that is absolutely worth

noting and giving credit or credit is due. Let's see. There was one more. Oh, yeah. Rosneft is a state monopoly. It's technically incompetent. It really has very few petroleum engineers. And it's gotten to where it is as being the biggest company in Russia by absorbing the assets of other people who have from time to time fallen a foul of the Kremlin. Maybe that's Yucos, which was run by a one-time Russian oligarch. Maybe that's TNK BP, which was a partnership that was part owned by British Petroleum. Or they just call themselves BP now. Anyway, its expansion through government thuggery rather than the traditional methods. Well, that's now reached its peak because there are a number of projects that

Raznev's is involved in and is technically the operator that it can't operate. It can only run the projects with foreign partners who are doing most of the technical lifting. And the biggest and most important of those is something called Sakalin. Now, that's an island off in the Russian far east just north of Japan that produced. produces some of the world's most difficult to produce crude oil in league with a company called Exxon, and which produces liquefied natural gas with a couple of Japanese companies, Mitsu and Mitsubishi. Well, now that the sanctions are in place, the Russians are going to have to run Sackland themselves, and they don't know how to do offshore, and they don't know how to do liquefied natural gas,

and they certainly can't operate in the Sackland environment. So here we've got a project that is the single largest dollar item, of foreign investment into Russia ever, that's probably going to shut down over the next few months because the Russians can't operate it themselves. Unless, of course, there's something that weird goes on where Exxon, for example, gets an exemption to the sanctions, which I don't find likely. Anyway, that's the minutia, most of which is pretty good for Ukraine and honestly broadly positive for the United States as well, so, you know, Mazel Tov.