WASHINGTON—The Treasury Department extended a sanctions carve-out allowing U.S. financial institutions to process transactions related to Russian energy sales for nearly six months as the U.S. seeks to minimize further disruption in global energy markets.
The sanctions exemption, which had been set to expire on June 24, will remain in place until Dec. 5, when the European Union’s ban on imports of Russian oil is set to go into place. While the U.S. has already banned the import of Russian energy, many energy sales abroad are denominated in dollars. The continuation of the carve-out will allow U.S. financial institutions to process payments for Russian energy in other countries.
“This license will provide for an orderly transition to help our broad coalition of partners reduce their dependence on Russian energy as we work to restrict the Kremlin’s revenue sources,” a Treasury spokeswoman said.
Energy sales remain a huge source of revenue for Russia during its war against Ukraine, and Western officials have sought to crimp those hard-currency streams and weaken Russia’s financial position. But at the same time, officials are grappling with soaring energy prices and the highest inflation in decades, pushing them to keep Russian energy on the market and keep global supply steady.
On other fronts, the U.S. has tightened sanctions on Russia, including by blocking U.S. financial institutions from receiving payments on Russian sovereign debt, a move that has pushed Russia toward default.
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