US & Russia Explore Energy Deals During Ukraine Peace Negotiations

US and Russian government officials discussed several energy deals on the sidelines of peace negotiations this month, according to five sources familiar with the talks. They said Washington offered these deals as incentives to push the Kremlin toward agreeing to peace in Ukraine and to ease US sanctions on Russia.

Sanctions Cut Russia Off From Energy Investments

Western sanctions, imposed after Russia invaded Ukraine in February 2022, have blocked Moscow from most international energy investments and major projects.

As part of the recent talks, officials considered allowing Exxon Mobil to re-enter Russia’s Sakhalin-1 oil and gas project, three sources revealed.

Four sources said the discussions also included potential US equipment sales for Russia’s Arctic LNG 2 project, which remains under heavy Western sanctions.

US Considered Buying Russian Icebreakers

Another proposal involved the US purchasing nuclear-powered icebreaker vessels from Russia, Reuters reported on August 15.

Sources confirmed these ideas emerged during US envoy Steve Witkoff’s trip to Moscow earlier this month, where he met President Vladimir Putin and investment envoy Kirill Dmitriev.

Two sources added that White House officials, including President Donald Trump, also discussed these deals in Washington.

One source said officials briefly discussed the deals at the Alaska summit on August 15.

“The White House really wanted to announce a big investment deal after the summit,” the source explained. “This is how Trump feels like he’s achieved something.”

A White House official confirmed that Trump and his national security team continue engaging with Russian and Ukrainian officials to reach a bilateral agreement to stop the war. The official added that further negotiations would not serve the national interest if made public.

A spokesperson for Dmitriev declined to comment. Exxon Mobil also refused to comment, while Rosneft and Novatek did not respond to requests.

At the same time, Trump threatened to impose harsher sanctions on Russia if peace talks stalled and warned of tariffs on India, a major buyer of Russian oil. Analysts said these measures could significantly restrict Russia’s oil export capacity.

Earlier this year, US officials had floated proposals to restore Russian gas flows to Europe. But with the EU pushing to phase out Russian gas imports by 2027, talks have now shifted toward bilateral US-Russia deals, sidestepping Brussels’ position.

On the day of the Alaska summit, Putin signed a decree allowing foreign investors, including Exxon Mobil, to regain shares in Sakhalin-1 if they support efforts to lift Western sanctions.

Exxon exited Russia in 2022 after the invasion, taking a $4.6 billion loss, while the Kremlin seized its 30% stake in the project.

Undermining Russia-China Partnership

Analysts noted the strategy aims to weaken the ‘no limits’ partnership between Russia and China, declared days before the Ukraine invasion.

Chinese President Xi Jinping has met Putin more than 40 times over the past decade, and Putin recently described China as an ‘ally’.

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