In October, US President Donald Trump announced a sanctions waiver for Russian oil, allowing Russia to immediately supply over two million barrels of diesel to US and global markets, with more to follow. The highly controversial decision to strike the deal with Russian President Vladimir Putin is a significant departure from years of concerted Western economic pressure on Russia following its invasion of Ukraine.

In addition, to and shortly after the announcement of the oil deal, President Trump issued a waiver of Russia-related sanctions under the Lindsey Graham Act, as well as tariffs that would have targeted major importers of Russian energy. He also urged Ukraine to stop attacking Russian energy refineries and claimed that the two countries had reached an ‘energy ceasefire’ agreement. In response, Ukraine paused its attacks on Russian oil infrastructure for three days but continued its strikes after Russia continued to attack Ukrainian energy facilities.

Federica D’Alessandra is the Co-Chair of the IBA Rule of Law Forum and the Executive Director of the Oxford Programme on International Peace and Security. She says the oil deal undermines the political coherence of the Western sanctions coalition and risks strengthening Russia’s diplomatic position. ‘Moscow can now point to Washington’s decision as evidence that sanctions are negotiable,’ she says. ‘The significance lies not only in the additional revenues Russia might receive, but in the perception that the Western coalition’s long-term commitment to economic pressure is becoming less predictable.’

Previous sanctions waivers used by the Trump administration to stabilise global oil markets have proven to be unpredictable. In March, the US issued a 30-day general licence to allow the sale and delivery of Russian seaborne crude oil, which was renewed twice and lasted until June. The US Treasury said the relief was necessary to stabilise crude market prices and allow oil to reach ‘energy-vulnerable countries’.

D’Alessandra says there is little evidence so far that offering Putin economic incentives would change his underlying strategic objectives in Ukraine. Instead it is more likely to undermine Washington’s negotiating leverage. ‘Because generally speaking, relief measures, to be effective, tend to be conditional on verifiable steps towards achieving specific negotiation objectives,’ she says.

Trump’s oil deal with Putin also raises serious legal questions about the relationship between presidential discretion and congressionally mandated sanctions. The waiver issued by Trump to allow the purchase and delivery of Russian oil appears to contradict the requirements of the 2022 Ending Importation of Russian Oil Act. The legislation established statutory restrictions on Russian energy imports, which can only be lifted if specific conditions related to Russia’s withdrawal from Ukraine are met.

Rebecca Hamilton, Professor of Law at the American University, says that the legal uncertainty related to the waiver creates serious compliance issues for American businesses because of the risk that importing Russian oil could still result in a breach. A group of House and Senate Democrats recently sent several major US banks letters asking them to preserve records relating to the import of diesel under the waiver and warning them to expect closer legal scrutiny of the deal. ‘The way this plays out is that even if Trump has issued this waiver, US entities may not actually import Russian oil because they are legitimately concerned they could be caught up in violating the 2022 law,’ she says.

In addition to the domestic legal concerns, the waiver issued by Trump does not relieve companies from obligations under EU or UK sanctions law. D’Alessandra says that transactions permitted under US law may remain prohibited for European shipping companies, insurers, banks and other service providers. ‘The regulatory fragmentation increases compliance costs and legal uncertainty, potentially complicating enforcement and creating incentives to restructure transactions around jurisdictions with fewer restrictions,’ she says.

The ‘energy ceasefire’ agreement announced by Trump is another example of Trump’s approach to attempting to end Russia’s invasion of Ukraine by dealmaking and unilateral decision-making. The integrity of the agreement was thrown into doubt, however, when Ukraine stated it was unaware of an ‘energy ceasefire’ agreement and Russia did not confirm or deny its existence.

International law prohibits attacks on energy infrastructure unless it qualifies as a military objective and is subject to compliance with proportionality and feasible precautions to protect civilians. Hafetz says that by Trump presenting protections required by international humanitarian law as bargaining concessions, he risks treating those obligations as optional. ‘At the same time, pressuring Ukraine to abandon strikes on Russian facilities that supply fuel to its armed forces constrains Ukraine’s lawful exercise of self-defence against aggression,’ he says.

D’Alessandra says that Trump’s oil deal with Putin could accelerate broader strategic divergence over Russia policy but does not mean that the Western sanctions regime is collapsing. ‘The EU and UK retain substantial autonomous sanctions powers, and the United States continues to maintain extensive restrictions on Russian financial institutions, businesses and individuals,’ she says. ‘Nevertheless, the longer-term implications could be considerable if the diesel agreement becomes a precedent for further unilateral US exemptions or broader energy-sector sanctions relief.’

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