A new era in US-Russian relations? Oil sanctions could be eased

Reuters has previously reported that the United States was exploring the possibility of lifting sanctions on selected Russian entities and individuals. At the time, however, it was unclear whether the initiative would also cover Russia’s fossil fuel industry. In recent days, however, the US administration has been actively preparing to determine how sanctions on Russian oil companies could be eased. Two sources close to the US president confirmed this to Reuters.

Easing energy sanctions and deepening bilateral relations are to be part of a broad plan focused on negotiations over the Russo-Ukrainian war. Washington will seek to ease pressure on Russia’s energy sector as quickly as possible if Putin agrees to end the armed conflict.

The US currently sanctions Russia by joining other global oil producers in capping the price of Russian oil at $60 per barrel. Recently, however, the White House issued a clear directive to explore options for easing energy sanctions ahead of expected talks between the US and Russian presidents. Trump’s cabinet asked the Treasury Department to summarize its preliminary findings on the matter.

If a swift agreement to end the fighting in Ukraine is reached, lifting sanctions on Russian oil would be closely tied to a range of Russian concessions. Trump has said he will meet his Russian counterpart in the coming weeks, again in Saudi Arabia. The meeting is expected to focus on reaching a ceasefire agreement.

The US president acknowledged that in recent days the United States had taken a tougher stance and imposed new sanctions on Russia’s energy sector after Russia attacked Ukraine’s energy and gas infrastructure. This was the first such attack since the US suspended the sharing of aid and intelligence with Ukraine.

In addition to examining the impact of US energy sanctions, the administration plans to explore the potential lifting of sanctions on selected entities and individuals, including some Russian oligarchs. Sanctions on these entities were first imposed after the annexation of Crimea in 2014.

Trump’s ambition to explore easing sanctions is driven by a desire to be able to act quickly and avoid delays caused by bureaucracy and other complications that may arise in the process. One example is the delay in lifting US sanctions on a Russian aluminum producer in 2019, which was accompanied by a 30% rise in aluminum prices on the market.

The Treasury Department is also examining how Russia’s full return would affect global oil prices and how it could change trade patterns that have shifted European markets away from Russian supplies and towards increased imports from the United States.