Aniket PujariThe US is tightening sanctions on Russia by restricting payments for energy even as it pursues peace negotiations with President Vladimir Putin’s government over the war in Ukraine.
The Trump administration quietly let expire a license covering payments for energy to a handful of Russian banks that were still allowed to receive payments in US dollars through what was known as “General License 8,” which had been in place since the start of the Russian invasion of Ukraine in February 2022.
The administration did not publicly announce or acknowledge the change, which was put in place by the outgoing Biden administration as part of a package of sanctions implemented in January. Among the provisions of that package, the Biden administration cut short the typical six-month time frame for the license, setting it up to expire at midnight March 12.
Letting the license expire “will significantly gum up the works of Russia’s oil and gas revenues,” said Edward Fishman, a former State Department official who worked on Russia sanctions in 2014. “If you are a foreign oil refinery or an oil trader or someone buying Russian gas and your bank wants to pay Russia for their oil and gas in dollars or by extension, really any other Western currency, you’re going find that very difficult to do.”
The Trump administration has been pursuing a peace agreement between Moscow and Kyiv and met with Ukrainian officials earlier this week, who agreed to a proposal for a one-month ceasefire. Putin said Thursday he wants to discuss the ceasefire proposal with President Donald Trump but that any truce should lead to a long-term resolution of the war.”
Treasury Secretary Scott Bessent said in an interview on CNBC that the US wouldn’t hesitate to impose additional sanctions on Russia to try to force the country to the table and that Trump is “willing to apply maximum pressure on both sides.”
A spokesperson for the Treasury Department did not immediately respond to a request for comment on Thursday.
The impact of the expiration is unclear, as many purchasers of Russian energy may have already complied with the restrictions in anticipation of the waiver expiring or may have set up alternative means of payment that circumvent western sanctions.
“It’s definitely a tightening but the question is how impactful is this in terms of hard dollars or value of actual oil trade,” said Daniel Tannebaum, a former Treasury official and partner at Oliver Wyman. “How much flow actually went through that channel is very unclear.”
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