US tightens grip on Russian oil trade, sanctions bite
The administration of U.S. President Donald Trump has not extended the sanctions waiver that allowed transactions with Russian banks related to trading Russian energy carriers. The decision to terminate this loophole was made by Joe Biden's administration and it expired on Tuesday.
According to CBS, as a result of the expiration of the so-called General License 8L, sanctioned Russian banks can no longer use the American financial system to process transactions related to trading oil and gas. This move is intended to significantly hinder Russia's ability to trade its resources in dollars. CBS reports that this might lead to an increase in oil prices by $5 per barrel.
Key sanctions loophole on Russia expired
This loophole existed since the beginning of the imposition of sanctions against Russian banks on the first day of Russia's full-scale invasion and was then periodically renewed by the Biden administration almost until the end of his presidency. The previous administration justified the exception with concerns about rising oil prices and worries about the consequences of disconnecting European economies from Russian resources.
The policy change occurred on January 10, in the final days of the Biden administration, when, along with imposing the first major sanctions against the Russian energy sector, it was decided to end the exception. Entities trading with Russia were given until March 12 to complete transactions. The new administration decided not to change the decision of their predecessors. According to Fox News, this was a conscious choice by Trump administration officials.
The Trump administration "remains focused on ending the fighting and fostering negotiations to end the war," the Treasury spokesperson said in an emailed statement. "We continue to implement our sanctions, which remain one of the levers to facilitate these goals," reported official, as cited by Reuters.
Nevertheless, when asked on Thursday whether he intends to use sanctions against Russia to compel Vladimir Putin to accept a ceasefire proposal, Trump said he "doesn't want to talk about it" because talks with Russia are ongoing. He described Putin's response to the truce offer as very promising, though incomplete.
Putin responds to truce proposal
Putin announced on Thursday that Russia supports the American proposal to end the conflict through peaceful means, but emphasized that any ceasefire should lead to lasting peace and must address the "fundamental causes of the conflict." He assessed that a 30-day ceasefire would be beneficial for Ukraine and that it is essential to examine the nuances of a potential truce.
Putin also said that if Russia and the United States agree on energy cooperation, it would be possible to build a gas pipeline to Europe. He noted that Europe needs cheap Russian gas.
The Russian president held talks on Thursday with Trump's envoy for the Middle East, Steve Witkoff.
