Trump Team Weighs Lifting Sanctions on Kremlin Fund to Fuel Diesel Deal

The Trump administration is evaluating a request to remove sanctions from the Russian Direct Investment Fund, a decision that would mark a major shift in US economic policy toward Moscow. The fund, which manages billions of dollars in global investments, was targeted by the Biden administration in 2022 shortly after Russia launched its full-scale invasion of Ukraine. At the time, officials labeled it a slush fund for Vladimir Putin and a symbol of Russian kleptocracy.

According to a US official, the review of the fund's application is part of a wider effort to improve relations between Washington and Moscow and assist in ending the war. The official described Kirill Dmitriev, the fund's chief, as a helpful envoy who is actively engaged in diplomatic discussions. Dmitriev has been serving as Putin's primary economic representative in talks with the Trump team, aiming to secure business opportunities for Russian companies.

Russian officials have lobbied for the sanctions relief as a component of broader negotiations. A central part of these talks involves the supply of Russian diesel fuel to the United States. The fund currently holds a leading role in executing this diesel agreement. The administration believes that establishing new commercial ties with Putin could pressure the Kremlin leader to end the conflict by demonstrating US commitment to prosperous relations.

Eric Green, who oversaw Russia policy at the National Security Council during the Biden era, noted that restricting the fund's access to Western financial systems was an early priority. He argued that this access could have enabled Russia to finance the war. The potential lifting of sanctions would counter years of US efforts to use economic pressure to force a cessation of hostilities.

Critics of the approach, including some Republican lawmakers, contend that the strategy hands economic benefits to Putin without applying sufficient pressure to end the war. The US Treasury Department is following its standard procedure for such reviews. Sources familiar with the process indicate that the fund must demonstrate that the original reasons for its designation no longer apply. The Treasury's review is a formal step that precedes any final decision on the fund's status.

The move aligns with other recent reports of easing restrictions on Russian entities. The administration has also considered loosening sanctions on vessels in Russia's shadow fleet, which transport oil and petroleum products. Additionally, US officials have reportedly offered Russia various economic incentives contingent on agreeing to an energy or maritime ceasefire with Ukraine. These coordinated efforts suggest a comprehensive strategy to link economic incentives with diplomatic progress.