Politico: White House mulls sanctions rollback that could boost Russia’s energy revenues, despite denials

The White House is reportedly weighing a potential easing of energy sanctions on Russian energy exports – a move that could restore a critical source of revenue for the Kremlin’s war coffers, which relies heavily on oil and gas to fund its military operations.

U.S. Special Envoy Steve Witkoff has emerged as a key advocate of the idea, Politico reports, citing multiple sources, familiar with internal discussions.

“Witkoff, who has said he has developed a friendship with Putin in his role as Trump’s envoy to Moscow, has directed his team to draw up a list of all of the energy sanctions that the United States has placed on Russia as part of the effort,” the report reads.

Russia’s oil and gas revenues have long been the backbone of its economy, accounting for up to 40 percent of federal budget revenues in recent years. Sanctions imposed after Russia’s all-out war against Ukraine in February 2022 are specifically designed to choke off this financial lifeline, and any rollback could hand Moscow a significant economic reprieve.

Among the proposals reportedly under discussion is the lifting of restrictions on the Nord Stream 2 gas pipeline and other Russian assets in Europe, in the context of broader talks on ending the war in Ukraine.

“Lifting the sanctions currently in place on one of Russia’s main pipelines connecting its natural gas fields to western Europe would be a sharp reversal in the U.S. policy,” the report reads.

However, a joint statement from U.S. Secretary of State Marco Rubio and Witkoff strongly denied the claims, saying no such talks have taken place.

“This is false. Neither of us have had any conversations about lifting sanctions on Russia as part of a peace deal with Ukraine,” their statement said. “This is just totally fictitious and irresponsible reporting from Politico, a fifth-rate publication. If they have an ounce of journalistic integrity they will fully retract this piece of fiction.”

Despite the denial, another source confirmed that Witkoff had indeed floated the idea of easing sanctions, though the proposal was not well received within the administration.

Both Rubio and Secretary of the Interior Doug Burgum, who also heads the White House Energy Dominance Council, are reportedly opposed.

“Restarting Nord Stream 2 could provide a financial windfall to Moscow, but only if the EU agreed to accept buying Russian gas via the pipeline again – a prospect that seems unlikely given the EU’s campaign to wean itself off Russian energy imports,” the report reads.

Allowing Russia to resume gas exports could also drive down global energy prices, putting U.S. liquefied natural gas exporters in direct competition with Russian suppliers, said Laurent Ruseckas, executive director a market analysis firm S&P Global Commodity Insights.