US Readies New Russia Sanctions If Putin Rejects Peace Deal

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(Bloomberg) — The US is preparing a fresh round of sanctions on Russia’s energy sector to increase the pressure on Moscow should President Vladimir Putin reject a peace agreement with Ukraine, according to people familiar with the matter.

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The US is considering options, such as targeting vessels in Russia’s so-called shadow fleet of tankers used to transport Moscow’s oil, as well as traders who facilitate the transactions, said the people who spoke on condition of anonymity to discuss private deliberations.

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The new measures could be unveiled as early as this week, some of the people said. 

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Treasury Secretary Scott Bessent discussed the plans when he met a group of European ambassadors earlier this week, the people said. “President Trump is the President of Peace, and I reiterated that under his leadership, America will continue to prioritize ending the war in Ukraine,” he wrote in a post on the social media platform X after the meeting.

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The people cautioned that any final decision rests with President Donald Trump. A request for comment placed with the Department of Treasury outside of business hours wasn’t immediately returned.

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A raft of sanctions imposed on Russia since it launched its full-scale war against Ukraine in 2022 haven’t changed Putin’s calculus so far. However, measures targeting Moscow’s oil majors and trade have seen crude prices plummet to their lowest levels since the invasion began, adding significant strain on the country’s already troubled economy.  

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The discussions over further measures come as US and Ukrainian negotiators made some advances this week toward the terms of a potential peace accord. US envoy Steve Witkoff was in Berlin for two days of talks with Ukrainian President Volodymyr Zelenskiy and European leaders over the latest proposals.

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US, Ukrainian and European officials hailed significant progress over a set of US-backed guarantees to ensure Kyiv’s post-war security. 

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Sticking points remain over the future status of territories in eastern Ukraine, the use of frozen Russian central bank assets and the management of the Zaporizhzhia nuclear power plant, some of the people said. Kyiv also wants to see in writing exactly what its allies would do should Russia re-invade Ukraine.

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Russia has demanded that Ukraine cede areas of the Donbas, which includes the Donetsk and Luhansk regions, and that Putin’s troops and proxies have tried and failed to occupy since 2014. US proposals have suggested turning the unoccupied area into a de-militarized or free economic zone under special administration. 

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It’s unclear whether that land would be de facto recognized as Russian under those plans and what, if any, concessions Moscow is prepared to offer in return. Kyiv and many of its allies have balked at the prospect of ceding territory to Russia and withdrawing troops from areas critical to Ukraine’s defense.