OFAC extends narrow sanctions carve-outs through June 18, 2026—because allies still need the energy.
January 27th, 2026: EU renews Russia sanctions despite Orbán resistanceNew here? Follow stories to track developments over time. Create a free account to get updates when stories you care about change.
Sanctions are supposed to close doors. On December 17, the U.S. quietly propped two doors back open—again—even as it slammed others shut. One narrow lane keeps Sakhalin-2 crude flowing to Japan. The other preserves financial channels for civil nuclear projects, even when payments touch sanctioned Russian banks. Both carve-outs now run through June 18, 2026.
The timing matters. Two months earlier, in late October 2025, Treasury designated Rosneft and Lukoil—Russia's two largest oil companies—in the first Russia sanctions move of Trump's second term, coordinated with the EU's sweeping 19th sanctions package and phased LNG import ban. Then in November, Hungary secured a one-year U.S. exemption for Russian oil and gas after Orbán met Trump in Washington. The pattern is the contradiction: Washington wants Russia poorer and weaker, but it also wants Japan's lights on, reactors worldwide fueled, and allied governments stable. These general licenses are the compromise—strict, conditional permissions that protect specific supply chains without admitting the dependencies still exist.
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OFAC writes the rulebook for sanctions—and the exceptions that keep the global economy from snapping.
Treasury uses sanctions to pressure Russia while trying not to shock allied energy systems.
A sanctioned Russian bank that still shows up in carve-outs because it’s embedded in energy and nuclear payments.
The operator at the center of a sanctions exception built to keep Japanese supply steady.
Russia’s gas giant, sitting behind the project that forces Washington into narrow exemptions.
A Japanese stakeholder whose continued involvement makes the U.S. carve-out politically urgent.
Russia’s nuclear heavyweight, whose global footprint makes ‘clean’ sanctions hard.
European Union extends its Russia sanctions package after overcoming Hungarian objections with energy-related assurances, keeping pressure intact as Orbán publicly predicts sanctions will end by 2027.
European Council gives final greenlight to stepwise ban on Russian gas imports. LNG ban takes effect April 25, 2026 for short-term contracts; January 1, 2027 for long-term contracts signed before June 17, 2025. Pipeline gas ban starts June 17, 2026 for short-term contracts.
President Trump approves legislation requiring 500% tariff on goods from any country continuing to purchase Russian oil, petroleum products, or uranium. Sen. Graham announces Trump greenlit the bill designed to give "tremendous leverage" against China, India, and Brazil to stop buying Russian oil.
At Budapest press conference, Hungarian PM says he expects Ukraine conflict resolved in 2026 and Western sanctions against Russia lifted, signaling Budapest's diplomatic divergence from EU consensus.
Japan publicly hails U.S. Treasury's extension of Sakhalin-2 LNG import permit through June 18, 2026, after Prime Minister Sanae Takaichi told Trump it would be difficult to withdraw from the project due to energy security concerns. Sakhalin-2 supplies nearly 10% of Japan's LNG imports.
GL 55E extends Sakhalin-2 authorizations under Japan-only conditions; GL 115C extends civil nuclear authorizations to June 18, 2026.
European Parliament votes to support provisional deal struck earlier in December to phase out Russian gas and LNG imports into EU by late 2027, providing legislative backing for the ban framework.
Council and Parliament reach provisional agreement on rules to phase out Russian gas imports, establishing framework for stepwise ban with specific timelines for LNG and pipeline gas.
Hungarian PM travels to Moscow to shore up Hungary's energy arrangements, leveraging the U.S. exemption granted weeks earlier.
A U.S. license related to Hungary’s nuclear project highlights how nuclear carve-outs keep recurring.
Orbán announces Hungary will mount court challenge against EU's planned Russian energy phase-out, escalating Budapest's clash with Brussels over energy sovereignty.
After Orbán-Trump meeting in Washington, U.S. grants Hungary exemption from sanctions affecting TurkStream gas and Druzhba oil pipeline flows; Hungary commits to $600M in U.S. LNG purchases and Westinghouse nuclear fuel contracts.
EU adopts sweeping package targeting Russian energy, finance, and shadow fleet—557 vessels now listed. LNG ban effective April 25, 2026 (or Jan 1, 2027 for long-term contracts signed before June 17, 2025).
OFAC adds Russia's two largest oil companies to SDN list under E.O. 14024, blocking assets and triggering 50% Rule for subsidiaries. Treasury Secretary Bessent cites Putin's refusal to negotiate seriously. OFAC issues GLs 124A, 126, 127, 128 for limited wind-down and specific project continuity.
OFAC issues GL 115B, keeping certain nuclear-related transactions authorized through December 19, 2025.
OFAC extends Sakhalin-2 authorizations to December 19, 2025, including petroleum-services relief tied to the project.
The U.S. petroleum services ban becomes active, tightening the compliance squeeze on Russia-related energy work.
Treasury issues the Petroleum Services Determination and publishes GL 115A for civil nuclear transactions.
Treasury designates Gazprombank and issues GL 55C to preserve specific Sakhalin-2-related pathways.
OFAC replaces GL 55A with GL 55B, authorizing Japan-only imports through June 28, 2025.
Reuters reports a Gazprom unit bought Shell’s former stake in Sakhalin Energy for about $1 billion.
OFAC issues GL 55A, extending the Sakhalin-2 shipping-related exception through June 28, 2024.
Treasury issues a determination under E.O. 14071 restricting services tied to maritime transport of Russian-origin crude.
Mitsui says Russia approved its plan to keep ownership in the restructured Sakhalin operator.
Russia invades Ukraine, setting off sweeping U.S. and allied sanctions with energy at the center.
Discussed by: Sanctions lawyers and energy-market watchers tracking repeated GL renewals; Reuters reporting on extensions
If the war grinds on and Japan and other partners still can’t fully replace these supply and payment channels, Treasury will likely extend again near the June 18, 2026 deadline. The most likely path is another time-boxed renewal with the same guardrails: Japan-only for Sakhalin-2 crude byproduct, and “existing civil nuclear only” for nuclear transactions. The pattern is already established: restrict broadly, then carve out the unavoidable.
Discussed by: Bloomberg-reported and Reuters-cited discussions about potential new Russia energy sanctions; European diplomatic consultations
If Washington decides the current pressure isn’t biting—or if diplomatic efforts collapse and the U.S. pivots to a harder energy squeeze—OFAC could narrow these authorizations, add reporting conditions, or let them expire. The trigger would be a deliberate political decision to accept higher allied transition costs (and more short-term market disruption) in exchange for more leverage on Moscow’s revenues and financial channels.
Discussed by: Reuters reporting on preparations for sanctions moves tied to a possible peace deal pathway
If negotiations around Ukraine move toward a framework deal, these licenses can function as pre-positioned “release valves.” Treasury could extend them further or convert them into broader authorizations as part of a stepwise sanctions relief package—sequenced to verified actions. The tell would be coordinated messaging: not just OFAC paperwork, but explicit diplomatic linkage between energy/nuclear permissions and negotiated outcomes.
Discussed by: Sanctions analysts citing Hungary exemption as template; Reuters and Bloomberg coverage of Orbán-Trump negotiations
Hungary's November 2025 one-year exemption for Russian oil and gas creates a working model for other allies with embedded energy dependencies. If Japan, certain EU states, or Central European partners face supply-chain or political crises tied to these sanctions, they could seek similar bilateral deals with Washington—trading commitments to buy U.S. energy or strategic alignment for temporary relief. The risk: carve-outs multiply, enforcement fragments, and the sanctions regime becomes a patchwork of bilateral negotiations rather than a unified pressure tool.
Discussed by: Sen. Lindsey Graham, bipartisan Congressional sponsors of Russia sanctions bill; foreign policy analysts tracking U.S.-China-India relations
If Congress passes and Trump implements the approved 500% tariff on countries buying Russian oil, uranium, or petroleum products, it would force major economies—especially China, India, and Brazil—into a stark choice: cut off Russian energy purchases or face devastating U.S. trade barriers. The tariff threat could fragment global trading patterns, trigger retaliatory measures, and create enforcement complexity as countries seek workarounds. Success depends on whether U.S. economic leverage outweighs these nations' domestic energy needs and geopolitical alignment with Moscow. The outcome would either dramatically tighten Russia's revenue squeeze or expose limits of unilateral U.S. economic coercion.
The U.S. tried to curb Soviet hard-currency earnings by restricting technology and participation in major gas pipeline projects. European allies pushed back hard, arguing the U.S. was exporting its policy at their expense.
The policy became a transatlantic fight as much as a Kremlin pressure tool.
It cemented a recurring lesson: energy sanctions work best when allies can absorb the costs.
Today’s Sakhalin-2 carve-out is the modern version of that constraint: allied dependence shapes enforcement.
The U.S. used sanctions on a major Russia-to-Europe gas project, then faced pressure to waive or calibrate enforcement to avoid rupturing alliances. The debate wasn’t only about Russia—it was about who pays the price of pressure.
Waiver decisions became signals of alliance management, not just energy policy.
It reinforced that sanctions often come with built-in escape hatches for partners.
GL 55E and GL 115C are “waivers by another name,” engineered to prevent allied self-harm.
As sanctions tightened, governments created narrow channels to permit certain essential trade while keeping the core pressure intact. The channels became politically controversial and operationally complex.
Compliance burdens rose, and disputes shifted to what qualifies for the exceptions.
Carve-outs became a standard feature of modern sanctions regimes.
The civil nuclear authorization functions like a channel: limited purpose, strict scope, constant scrutiny.