The United States has announced new sanctions targeting Russia’s two largest oil companies in an effort to pressure Moscow to negotiate a peace deal in Ukraine. The announcement came one day after President Donald Trump said a planned meeting with his Russian counterpart Vladimir Putin in Budapest would be shelved indefinitely.

Every time he speaks to Putin, Trump has good conversations and then they don’t go anywhere, the president explained. While the economic impact to Russia is likely to be minimal, it represents a major shift in foreign policy, having previously said he would not impose sanctions until European nations ceased buying Russian oil.

Trump grows frustrated with lack of progress

The president had repeatedly threatened tougher measures against Moscow but avoided them until now in hopes of brokering a peace deal in the three and a half year long invasion. His administration has sought to cast the U.S. as a somewhat neutral mediator between the two warring nations, after years of full throated support for Ukraine from his predecessor, Joe Biden.

But Trump has grown increasingly exasperated with the Kremlin over its failure to move forward with negotiations. The sanctions are also something Ukraine’s leader, Volodymyr Zelensky, has been calling for. He said they were a good signal from the U.S., adding that a ceasefire was possible if other nations applied more pressure on Russia.

On Wednesday, Trump criticized Putin for not being serious about making peace and said that he hoped the sanctions would force a breakthrough. He felt it was time after waiting a long time. He called the sanctions package tremendous, adding that he hoped they could be swiftly withdrawn if Russia agreed to stop the war.

Sanctions target major Russian oil exports

U.S. Treasury Secretary Scott Bessent said the sanctions were needed due to Putin’s refusal to end this senseless war. He said the affected oil companies, Rosneft and Lukoil, funded the Kremlin’s war machine.

Oil and gas are Russia’s biggest exports. The two Russian oil firms export 3.1 million barrels of oil per day. Rosneft is responsible for nearly half of all Russian oil production, which makes up 6% of the global output.

Moscow’s biggest customers include China, India and Turkey. Trump has also urged these countries to halt purchases of Russian oil in a bid to put economic pressure on the Kremlin. Ukraine has in recent months targeted Russian oil refineries and energy infrastructure in an attempt to hurt its economy.

Meeting plans collapse after failed call

Zelensky had visited the White House on Friday, seeking to acquire long range Tomahawk missiles that could strike deep into Russian territory, but came away empty handed. The day before, Trump had announced the proposal to meet Putin in Hungary after an unscheduled call from the Russian leader.

But following a call between Secretary of State Marco Rubio and his Russian counterpart Sergei Lavrov, the idea was put on hold, with Trump saying he didn’t want a wasted meeting.

Trump later said he had refused to give Ukraine the missiles as they were highly complex and took a year of intense training to use. Zelensky appeared to suggest that, like with the sanctions, the president may change his mind in the future.

Europe backs new pressure campaign

Last week, the UK slapped a similar sanctions package on Rosneft and Lukoil, with Chancellor Rachel Reeves stating that there is no place for Russian oil on global markets. Russia’s embassy in London said targeting its country’s major energy companies would disrupt global fuel supplies and drive up costs worldwide.

Europe’s reliance on Russian oil and gas has fallen dramatically since the start of Moscow’s full scale invasion of Ukraine, but Russian gas still accounts for 13% of EU imports, though the bloc has pledged to phase it out completely.

EU Commission President Ursula Von der Leyen praised a new sanctions package approved by the EU on Wednesday, which includes a ban on Russian liquefied natural gas imports by 2028. She said this, along with the U.S. sanctions, were a clear signal from both sides of the Atlantic.

NATO Secretary General Mark Rutte was at the White House when the sanctions were announced and praised the move for putting more pressure on Putin. He was expected to discuss a 12 point plan that would see the current front lines frozen, a return of deported children and a prisoner exchange.