(Bloomberg) — The United States is preparing a new round of sanctions on Russia’s energy sector to increase pressure on Moscow if President Vladimir Putin rejects a peace deal with Ukraine, according to people familiar with the matter.
The United States 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 merchants 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.
Treasury Secretary Scott Bessent discussed the plans when he met with a group of European ambassadors earlier this week, the people said. “President Trump is the President of Peace, and he 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.
The people warned that every final decision belongs to President Donald Trump. A request for comment made to the Treasury Department outside business hours was not immediately returned.
The Kremlin is aware that some US officials are considering plans to introduce new sanctions against Russia, Putin’s spokesman Dmitry Peskov told reporters Wednesday, according to the Interfax news service. “It is obvious that any sanction is harmful to the process of rebuilding relations,” he said.
Oil rose briefly after the news. Brent futures advanced as much as 70 cents a barrel to trade as high as $60.33, before paring their advance.
A series of sanctions imposed on Russia since it began its full-scale war against Ukraine in 2022 has not changed Putin’s calculus so far. However, measures targeting Moscow’s major oil and trading companies have seen commodity prices fall to their lowest levels since the invasion began, adding significant pressure to the country’s already troubled economy.
The discussions on further measures come as US and Ukrainian negotiators made some progress this week towards the terms of a potential peace deal. The American envoy Steve Witkoff was in Berlin for two days of talks with the Ukrainian President Volodymyr Zelenskiy and with the European leaders about the latest proposals.
American, Ukrainian and European officials hailed significant progress on a set of US-backed guarantees to ensure Kiev’s security after the war.
Some of the people said that they remain on the future status of the territories in the east of Ukraine, the use of frozen assets of the Russian central bank and the management of the Zaporizhzhia nuclear power plant. Kyiv also wants to see in writing exactly what its allies will do if Russia invades Ukraine again.
Russia has demanded that Ukraine cede areas of the Donbas, which include the Donetsk and Luhansk regions, that Putin’s troops and proxies have tried and failed to occupy since 2014. The US proposals suggested turning the unoccupied zone into a demilitarized or free economic zone under special administration.
It is unclear whether that land would be de facto recognized as Russian under those plans and what, if any, concessions Moscow is willing to offer in return. Kyiv and many of its allies balked at the prospect of ceding territory to Russia and withdrawing troops from areas critical to Ukraine’s defense.
US officials also see frozen Russian assets as part of any future peace arrangement, some of the people said, as European leaders will decide later this week whether to tap frozen assets to provide military and economic aid to Ukraine. Moscow reacted furiously to that prospect, a sign, some of the people said, that it is trying to prevent the move from materializing and is seeking to ease sanctions on its increasingly ailing economy.
With negotiations weighed down by difficult questions about territory and security guarantees, attention is shifting to Putin’s response, with little indication so far that he is ready to end his attacks or change his targets.
Russian Deputy Foreign Minister Sergei Ryabkov said this week that he is “very confident” that the war is coming to an end. Still, he told ABC News in an interview that Moscow’s territorial claims have not changed — and ruled out the deployment of NATO troops to Ukraine under a peace deal.
“I am quite sure that we are on the verge of solving this terrible crisis,” Ryabkov said, without elaborating. “We are ready to have an agreement, to use the word of President Trump, and my hope, keeping my fingers crossed, would be that it comes sooner rather than later.”
A few sanctions on Russia did little to raise the price of oil, a market that is moving into a surplus that is only expected to grow next year. Brent futures are down 20% this year and fell to their lowest since February 2021 on Tuesday.
The United States has already sanctioned four major Russian producers and, along with other Group of Seven nations, hundreds of tankers involved in transporting Moscow’s oil.
Witkoff and Jared Kushner, Trump’s son-in-law, had five hours of talks with Putin in the Kremlin on December 2.
Zelenskiy said on Monday that he has an agreement with the United States to make security guarantees legally binding through a vote in Congress as part of any deal to end the war. He also said that he expects the United States to consult with Russia next, while Ukrainian negotiators may return to the United States for more talks in the coming days.
–With assistance from Alaric Nightingale.
(Updates with Kremlin comment in the sixth paragraph.)
