Trump Waives Russian Oil Sanctions as Europe Keeps Buying Moscow's Gas

US President Donald Trump has signed an executive order exempting Russian sanctions just approved by Congress, arguing the move serves America's "national interest." The decision came only days before the measures were due to take effect.

Earlier in the month, Trump also announced a deal to bring Russian diesel to global markets to cool surging energy prices amid the US-Israel conflict with Iran. The US Treasury exempted Russian diesel sales from sanctions through April 2027.

Trump's softening toward Russian energy has drawn objections from Ukraine, European partners and many US officials, who argue it hands benefits to Moscow while it continues a war with its neighbor now in its fourth-and-a-half year. Ukrainian President Volodymyr Zelenskyy slammed the diesel deal as a "gift" to Russian President Vladimir Putin that helps fund his war effort.

While European countries have also criticized Trump's easing of pressure on Russian energy, the US president accused them of "hypocrisy," citing data showing EU countries continue to import Russian gas.

Which sanctions were waived?

In the executive order, Trump suspended a range of planned Russia-related sanctions, including tariffs on Russian goods and penalties over purchases of the country's oil and gas.

The blocked measures belonged to a bill passed by Congress with bipartisan support and named after the late Senator Lindsey Graham, a fierce critic of Russia. The bill would have imposed tariffs of up to 100% on all goods imported into the US from the five countries that buy the most Russian crude or gas, including China and India. It could also have applied equivalent penalties to countries deemed to have deliberately bought Russian oil and gas 30 days after the law took effect, or to be among five countries helping Moscow evade oil sanctions.

Under the order, the exemption lasts until the Trump administration deems "further action necessary." Democratic Representative Don Beyer of Virginia called the waiver tantamount to "surrender to Putin," a "betrayal of our Ukrainian partners and a defiance of the clear will of Congress."

Who benefits?

Vasily Astrov, an economist at the Vienna Institute for International Economic Studies, told Al Jazeera the Russian government is likely the biggest beneficiary, since easing sanctions means Russian oil no longer has to be sold at a deeper discount. He estimated about 60 cents of every extra dollar in the price of a barrel of Russian oil "flows into state coffers."

Putin's special envoy Kirill Dmitriev hailed the US exemption as "a pivotal and truly historic moment." Major buyers of Russian oil and gas such as China and India also stand to gain, facing less risk of secondary US sanctions.

Although Trump hopes the measures will lower oil prices for US consumers ahead of November's midterm elections, experts say that is far from certain. EU Economy Commissioner Valdis Dombrovskis said the diesel deal with Russia is unlikely to significantly affect global prices. According to Trump, the deal will put 300,000 tonnes of diesel onto US and global markets "immediately," followed by 500,000 tonnes in November and 1 million tonnes after that.

"In terms of volume, they are not macroeconomically significant, and frankly there are a lot of doubts whether Russia is even able to supply those volumes, and by US quality standards, those are big question marks," Dombrovskis told AFP.

Which countries still buy Russian oil?

China and India are the largest buyers of Russian crude, at 6 billion euros ($6.74 billion) and 3.6 billion euros ($4.04 billion) respectively in September, according to the Centre for Research on Energy and Clean Air (CREA).

Hungary and Slovakia, two landlocked EU members exempt from the bloc's ban on Russian crude, also remain major customers, buying a combined 290 million euros ($326 million) in September. Turkey imported 172 million euros ($193 million) of Russian crude the same month.

Since late 2022, the biggest importers of Russian oil products, including diesel, have been Turkey, China, Saudi Arabia, Brazil and Singapore. Saudi Arabia imported the most Russian oil products in September at 534 million euros ($600 million), followed by Turkey at 321 million euros ($361 million), China at 304 million euros ($342 million) and India at 161 million euros ($181 million).

Is Europe buying more Russian gas?

After a two-day European Council meeting in Brussels, EU leaders issued a joint statement expressing regret over the US decision to temporarily lift sanctions on Russian diesel.

Despite a near-total ban on Russian oil, the EU continues to import large volumes of Russian gas, though it plans to phase out those imports next year. Germany-based research group Urgewald reported that more than 12 million tonnes of Russian Arctic LNG were shipped into EU ports between January and September this year, up 9.5% year on year.

According to CREA, in September EU countries imported 817 million euros ($918 million) of pipeline gas and 615 million euros ($691 million) of liquefied natural gas (LNG). France and the Netherlands were the largest LNG importers, at 446 million euros ($501 million) and 116 million euros ($130 million) respectively. France's LNG imports rose 103% from the previous month.

French President Emmanuel Macron was among the sharpest critics of the diesel deal with Russia, saying it "sends a negative message" and has no effect on global prices. Hungary imported the most Russian pipeline gas among EU members in the month, at 414 million euros ($465 million), followed by Slovakia at 161 million euros ($181 million) and Bulgaria at 132 million euros ($148 million).