The Trump administration has imposed stricter sanctions on Russia’s oil, gas, and banking sectors by letting an exemption expire that had allowed Russian banks to conduct energy transactions through US payment systems. The move, which took effect on 13 March, is expected to make it more difficult for countries to buy Russian oil, potentially pushing prices up by as much as $5 per barrel.
The exemption, initially granted under the Biden administration, allowed transactions related to oil, gas, coal, and uranium involving a group of sanctioned Russian financial institutions. The affected banks include Vnesheconombank, Sberbank, VTB Bank, Alfa-Bank, and the Central Bank of Russia.
The US Treasury did not publicly announce the decision to let the exemption lapse. However, officials have indicated that restricting Russia’s access to US dollar payments will further pressure Moscow’s economy as negotiations over a 30-day ceasefire in Ukraine continue.
Ceasefire negotiations face hurdles
Ukraine agreed to the US-backed ceasefire proposal on 11 March during talks in Jeddah, provided that Russia also agrees. Russian President Vladimir Putin said on 13 March that he supports the idea of a temporary truce but has set conditions, including guarantees that Ukraine will not mobilise troops, train soldiers, or receive military aid during the ceasefire.
Putin’s demands have been met with scepticism in Kyiv. Ukrainian President Volodymyr Zelensky accused Russia of setting preconditions designed to delay rather than facilitate peace. “Putin doesn’t say no directly, but in practice, he’s preparing a rejection,” Zelensky said.
The Trump administration has positioned itself as a mediator, with Trump stating that he is willing to meet with Putin to push forward ceasefire discussions. Treasury Secretary Scott Bessent has also suggested that additional economic measures could be imposed on Russia if it refuses to engage in peace talks.
Russia weighs its options
Western analysts remain cautious about the effectiveness of the sanctions, noting that many Russian energy buyers may have already adjusted to alternative payment methods in anticipation of tighter restrictions.
For Putin, the ceasefire negotiations present an opportunity to strengthen Russia’s position in the war. Moscow has continued military operations in eastern Ukraine and recently claimed to have retaken large portions of the Kursk region from Ukrainian forces.
With US special envoy Steve Witkoff set to meet with Russian officials in Moscow, the next phase of negotiations will test whether Russia is serious about halting hostilities or using the talks to secure strategic advantages.