Sanctions tighten as U.S. ends Russian oil loophole
The administration of U.S. President Donald Trump did not extend the sanctions waiver that allowed transactions with Russian banks related to the trading of Russian energy carriers. The decision to terminate this loophole was made by Joe Biden's administration and 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 the trading of oil and gas. This move is intended to significantly hinder Russia's ability to trade its resources in U.S. dollars. CBS reports that this may lead to an increase in oil prices by approximately $5 (CAD 7,2) per barrel.
Key sanctions loophole on Russia expired
This loophole had been in place since the beginning of sanctions against Russian banks, which started on the first day of Russia's full-scale invasion. It was periodically renewed by the Biden administration almost until the end of his presidency. The previous administration justified the exception by expressing concerns about rising oil prices and the potential impact on European economies reliant on Russian resources.
The policy change occurred on January 10, in the final days of the Biden administration, when it decided to end the exception while also imposing the first major sanctions against the Russian energy sector. At the same time, entities trading with Russia were given until March 12 to complete transactions. The new administration decided not to change the decision of its 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" since 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. However, he emphasized that any ceasefire should lead to a lasting peace and thus must address the "root causes" of the war. He suggested that a 30-day ceasefire would benefit Ukraine and that it is essential to examine the details of a potential truce.
Putin also mentioned that if Russia and the United States agree on energy cooperation, it would be feasible to construct a gas pipeline to Europe. He noted that Europe needs affordable Russian gas.
The Russian president held talks on Thursday with Trump's envoy for the Middle East, Steve Witkoff.
