US-Russia Energy Deal Proposals Emerge in Ukraine Peace Talks

U.S. and Russian government officials have discussed a series of potential energy agreements as part of negotiations aimed at achieving peace in Ukraine, according to foreign media reports citing sources familiar with the talks. The proposals are intended to encourage the Kremlin to agree to a peaceful settlement to the Ukrainian conflict, in exchange for a potential easing of sanctions imposed by Washington on Russia.

Since the outbreak of the Russo-Ukrainian conflict in February 2022, the Russian energy sector has faced severe restrictions due to international sanctions, limiting access to major foreign investments and deal-making.

Details of the Proposed Deals

According to three sources, discussions include the possibility of ExxonMobil re-entering the Russian Sakhalin-1 oil and gas project. Additionally, four sources indicated the potential for Russia to purchase U.S. equipment for its liquefied natural gas (LNG) projects, such as the Arctic LNG 2 project, which is currently subject to Western sanctions.

Another idea under consideration is the U.S. purchasing nuclear-powered icebreakers from Russia, as reported by foreign media on August 15. Three sources stated that these talks took place during a visit by U.S. envoy Witkov to Moscow earlier this month, where he met with Russian President Vladimir Putin and his investment envoy, Dmitriev. Two sources mentioned that these issues were also discussed at the White House with U.S. President Trump.

One source indicated that the agreements were also briefly discussed at the Alaska summit held on August 15. "The White House was very keen to get a headline out after the Alaska summit announcing a big investment deal," one of the sources said. "That’s how Trump felt he got an achievement."

In response to questions about the agreements, a White House official stated that Trump and his national security team continue to engage with Russian and Ukrainian officials to facilitate a bilateral meeting aimed at stopping the bloodshed and ending the conflict. The official mentioned that further public negotiation of these issues is not in the national interest.

Threats and Negotiations Side-by-Side

Trump has threatened to impose further sanctions on Russia and levy heavy tariffs on India, a major buyer of Russian oil, unless progress is made in the talks. Such measures would make it difficult for Russia to maintain the same level of oil exports.

Trump’s deal-making political style was not the first of its kind in the Ukraine negotiations. Earlier this year, the same officials explored ways to restore the flow of Russian gas to Europe, but these plans were frozen by Brussels, which has proposed a complete phasing out of Russian gas imports by 2027.

The recent discussions have shifted to bilateral agreements between the U.S. and Russia, bypassing the European Union, which stands firmly in support of Ukraine.

On the same day as the Alaska summit, Putin signed a decree that may allow foreign investors, including ExxonMobil, to regain their shares in the Sakhalin-1 project. But the condition is that foreign shareholders take action to support the lifting of Western sanctions on Russia.

Following the Russo-Ukrainian conflict in 2022, ExxonMobil withdrew from its operations in Russia, recording an impairment charge of $4.6 billion. Its 30% operator stake in the Sakhalin-1 project in the Russian Far East was seized by the Kremlin in the same year.

Starting in 2022, the United States has imposed several rounds of sanctions on the Russian Arctic LNG 2 project, cutting off access to ice-class vessels needed for operation in the region. Novatek holds the majority stake in the project and began working with lobbyists in Washington last year in an attempt to rebuild relationships and lift sanctions.

According to foreign media reports, the Arctic LNG 2 plant resumed gas processing in April, although at low production. Five cargoes have been loaded from the project onto sanctioned tankers this year. One production line was previously closed due to export difficulties resulting from sanctions.

The project was planned to have three LNG processing production lines. The third is in the planning stages.

One source stated that Washington is trying to urge Russia to purchase U.S. technology.