US Considers Sanctions Relief for Kremlin Investment Fund Amid Diesel Deal

The Trump administration is reviewing a request to lift sanctions on the Russian Direct Investment Fund (RDIF), headed by Kremlin envoy Kirill Dmitriev, The New York Times reported, citing an unnamed US official.

The US Department of the Treasury is considering the removal of restrictions against the fund to improve relations with Russia, a move expected to contribute toward ending Russia's full-scale invasion of Ukraine.

The request to remove the sanctions was initiated by RDIF head and Kremlin special envoy Kirill Dmitriev. He raised the issue during negotiations regarding potential deliveries of Russian diesel fuel to the United States, offering himself and the fund as intermediaries for commercial deals between the two nations.

The US official described Dmitriev as a useful intermediary in talks between Washington and Moscow. The US Department of the Treasury originally imposed sanctions against Dmitriev and the RDIF on February 28, 2022, four days after the start of Russia’s full-scale invasion of Ukraine, designating the fund as Vladimir Putin’s “slush fund,” The New York Times reported.

The RDIF was previously used to attract international investors into Russian companies and expand Russia’s economic influence abroad. Ukrainian President Volodymyr Zelenskyy stated that the United States may continue to ease sanctions on Russia, calling the so-called “diesel deal” only a first step that will not force Vladimir Putin to end the war.

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The prospective lifting of sanctions directly tied into a broader agreement between Washington and Moscow regarding Russian energy supplies.

Under the proposed terms, Russia was expected to supply over 300,000 tonnes of diesel to the US and global markets immediately, with an additional 500,000 tonnes scheduled for November and another million tonnes planned thereafter. According to Donald Trump, Moscow could potentially deliver up to an additional 3 million tonnes if market conditions allowed.

While advocates framed the trade deal as a necessary step to curb record US fuel prices, critics warned that it amounted to immediate, unearned sanctions relief for Moscow, generating revenue that could directly finance Russia’s ongoing full-scale invasion of Ukraine.

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