The United States is considering a fresh barrage of sanctions against Russia’s oil exports if Russian President Vladimir Putin rejects a peace agreement for Ukraine, anonymous sources with knowledge of the plans told Bloomberg on Wednesday. 

Earlier this week, the U.S. and Ukraine both signaled progress in negotiations about a peace agreement during talks in German capital city of Berlin. Washington is now reportedly offering Ukraine security guarantees modeled on NATO’s Article 5 mutual defense pledge. 

However, key issues about territory remain unresolved, and Putin has signaled he wants all occupied territory.  

U.S. President Donald Trump is said to be pushing for a U.S.-brokered deal by Christmas. 

On Tuesday, Ukrainian President Volodymyr Zelenskyy said that a U.S.-brokered draft deal to end the war could be presented to Russia within days. It is not certain how Russia would react—it has rejected all drafts so far insisting on its own territorial claims and conditions. 

Now the U.S. is already considering how to escalate the sanctions. The Treasury could target additional vessels of the Russian shadow fleet transporting oil, as well as traders found to have facilitated such transactions, according to Bloomberg’s sources. 

The sanctions could be announced later this week, some of these sources told Bloomberg.  

The previous round of U.S. sanctions – the Trump Administration’s first against Russia – are still reverberating through the global oil markets as they upended trade flows. The sanctions designated Russia’s top two producers and exporters, Rosneft and Lukoil, and sent Indian buyers scrambling for non-sanctioned crude and Lukoil’s international assets fighting for U.S. waivers to continue normal operations and negotiate asset sales.  

Asked to comment on Bloomberg’s report that the U.S. readies additional sanctions, Kremlin spokesman Dmitry Peskov said today that “Any sanctions harm the fostering of relations, that is obvious,” as carried by Russian news agency Interfax. 

By Michael Kern for Oilprice.com

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