Amid tariff woes for India, US weighs energy deals with Russia even as Ukraine war rages

U.S. and Russian officials recently discussed a series of potential energy deals on the sidelines of peace negotiations aimed at ending the war in Ukraine, Reuters reported, citing five sources familiar with the talks.

According to the report, the proposed deals were framed as incentives to encourage Moscow to agree to a peace settlement and for Washington to consider easing sanctions. Russia has faced sweeping curbs on its energy sector since the February 2022 invasion of Ukraine.

Among the proposals discussed was the possibility of Exxon Mobil re-entering Russia’s Sakhalin-1 oil and gas project, three of the sources told Reuters. Talks also touched on Russia buying U.S. equipment for its sanction-hit LNG projects, including Arctic LNG 2, four sources said. Another idea under discussion was the U.S. purchasing nuclear-powered icebreaker vessels from Russia, Reuters added.


The discussions reportedly took place during U.S. envoy Steve Witkoff’s visit to Moscow earlier this month, when he met President Vladimir Putin and his investment envoy Kirill Dmitriev. They were also raised at the Alaska summit on August 15, one source told Reuters, and discussed within the White House with U.S. President Donald Trump, two others said.

“The White House really wanted to put out a headline after the Alaska summit, announcing a big investment deal,” Reuters quoted one source as saying. “This is how Trump feels like he’s achieved something.”

In response, a White House official told Reuters that Trump and his national security team “continue to engage with Russian and Ukrainian officials towards a bilateral meeting to stop the killing and end the war,” but added it was not in the U.S. interest to negotiate such issues publicly.

Exxon Mobil declined comment, while Russian energy firms Rosneft and Novatek did not respond, Reuters reported. A spokesperson for Dmitriev also declined to comment.

The reported talks coincided with Trump threatening to impose further sanctions on Russia unless peace efforts progress, as well as fresh tariff threats against India, a key buyer of Russian oil.

On the same day as the Alaska summit, Putin signed a decree potentially allowing foreign investors, including Exxon Mobil, to regain stakes in Sakhalin-1, contingent on action to lift Western sanctions. Exxon had exited Russia in 2022, taking a $4.6 billion impairment after its stake was seized.

Reuters noted that Washington is seeking to steer Moscow toward U.S. technology over Chinese alternatives, as part of a strategy to weaken the Russia-China partnership.

(With inputs from Reuters)