The White House is debating whether to lift sanctions on Russia’s Nord Stream 2 natural gas pipeline and potentially other Russian assets in Europe as part of discussions on ending the war between Russia and Ukraine, five people familiar with the discussions told POLITICO.
Lifting the sanctions currently in place on one of Russia’s main pipelines connecting its natural gas fields to Western Europe would be a sharp reversal in the U.S. policy first put in place during President Donald Trump’s first term. President Joe Biden waived those sanctions early in his term, but reimposed them after Russian President Vladimir Putin launched the invasion of Ukraine in 2022.
Restarting Nord Stream 2 could provide a financial windfall to Moscow, but only if the EU agreed to accept buying Russian gas via the pipeline again — a prospect that seems unlikely given its campaign to wean itself off Russian energy imports. But lifting the sanctions would amount to a diplomatic coup for Russia and a major concession from Trump.
White House special envoy Steve Witkoff has been the main proponent of lifting sanctions, people familiar with the talks told POLITICO. Witkoff, who has said he has developed a friendship with Putin in his role as Trump’s envoy to Moscow, has directed his team to draw up a list of all of the energy sanctions that the United States has placed on Russia as part of the effort, two people familiar with the matter said.
One of the two Nord Stream 2 pipelines built to deliver gas via the Baltic Sea to Germany is still operable despite a 2022 explosion that destroyed one line, as well as the pair of pipelines that were part of its companion, Nord Stream 1. The blast in September 2022 that halted shipments of gas remains under investigation, though reports have linked the explosion to Ukrainian nationals.
The Biden administration also placed sanctions on Russia’s Arctic 2 liquefied natural gas project, which could deliver up to 13.2 million tons of gas a year if those sanctions were lifted.
Trump criticized Nord Stream during his first term and on the campaign trail. He attacked Biden for waiving sanctions on the project in 2021 before later reimposing them.
Witkoff and Secretary of State Marco Rubio had been expected to participate in peace settlement talks scheduled Wednesday in London but bailed at the last minute. Included in the administration’s settlement plan was a recognition of Russia’s illegal 2014 annexation of Crimea and a lifting of sanctions — two things Ukraine said it would not agree to. The European Commission may suggest a ban on EU member countries signing new contracts with Russia for oil and gas.
A second person said that while Witkoff has raised lifting energy-related sanctions, the idea so far has not found much traction in the White House and that Rubio has tried to derail it. “This is not a cake in the oven being baked, though the ingredients are being assembled,” this person said.
The White House declined to comment. A spokesperson for Witkoff declined to comment.
Among the people against the idea are Rubio and Interior Secretary Doug Burgum, who is also head of the White House Energy Dominance Council, people familiar with the debate said. Some in the U.S. government think Witkoff has been misled by the Kremlin about the extent of the economic opportunity for the U.S. in restoring business ties with Russia, according to another person familiar with the matter.
“There is an internal White House debate between the energy dominance people — Burgum, who wants markets for U.S. LNG — and Witkoff, who wants to be closer to Russia,” one of the people said. Russia regaining its status as Europe’s top energy supplier would be “a bloodbath for American [oil and gas] producers,” this person continued.
The State Department did not respond to questions. The Interior Department did not reply to an email with questions for Burgum.
Allowing Russia to resume shipments of gas via Nord Stream 2 or Arctic 2 LNG would depress global gas prices and put U.S. LNG exporters like Cheniere Energy and other companies in direct competition with Russia, said Laurent Ruseckas, executive director a market analysis firm S&P Global Commodity Insights.
“If you bring Russian gas back into the market, that would reduce the appetite of potential buyers of U.S. LNG,” Ruseckas said in an interview.
The U.S. natural gas industry had made major inroads into Europe as Germany and other countries turned away from Russia as an energy supplier following its invasion of Ukraine. But oil and gas companies are now reeling from the Trump administration’s trade war and its tariffs on imported steel. The White House’s generally opaque trade policy has also made companies scale back their investing plans.
Multiple outsiders are lobbying the administration to lift the sanctions, two of the people said. One of the wooers is Stephen Lynch, a Miami-based head of global private investment firm Monte Valley Partners.
Lynch has made a specialty of buying energy infrastructure assets that had previously belonged to Russia. He and his partners in 2007 purchased parts of the Russian oil company Yukos at a steep discount. More recently, he purchased the Switzerland-based branch of Russian financial firm SberBank. He has applied for a license from the U.S. Treasury Department as part of his efforts to buy the pipeline.
A Monte Valle representative did not reply to questions.
Matthias Warnig, a former spy and close friend of Putin who is under U.S. sanctions, has also been working on an effort to restart the pipeline with the backing of U.S. investors. He has reached out to the Trump team through American business representatives and his effort is understood to be separate from Lynch’s consortium.
The Biden team was not interested in Lynch’s efforts to buy the pipeline last year.
Robbie Gramer contributed to this report.