The Obama administration escalated its sanctions Wednesday against Russia over the fighting in Ukraine, marking a return to confrontation with President Vladimir Putin after determining that his hints at cooperation were leading nowhere.

The U.S. moves to impose restrictions on the Russian state-controlled oil giant OAO Rosneft and other top firms are aimed at squeezing Russia's already struggling economy and financial system. They followed weeks of U.S. threats that Russia would face repercussions unless it helped defuse...