The Trump administration delivered a setback to Exxon Mobil Friday, announcing that it would not grant the oil giant a waiver from sanctions against Russia that would allow drilling in the Black Sea.
The decision, reinforcing trade barriers erected by the United States over Russia’s intervention in Ukraine, was another sign that President Trump has been unwilling or unable to improve relations with the Kremlin early in his term, after pledging as a candidate that he would seek a thaw.
“In consultation with President Donald J. Trump,” Treasury Secretary Steven Mnuchin said in a terse, prepared statement, “the Treasury Department will not be issuing waivers to US companies, including Exxon, authorizing drilling prohibited by current Russian sanctions.”
The prospect of a waiver had drawn denunciations from both Democratic and Republican lawmakers. When news of Exxon Mobil’s proposal emerged this week, Arizona Senator John McCain asked in a Twitter post, “Are they crazy?”
The matter was complicated by the continuing congressional scrutiny of reports of Russian intervention in support of Trump in the 2016 election, and by Secretary of State Rex Tillerson’s previous position as Exxon Mobil’s chief executive.
Exxon Mobil applied for the waiver in 2015, arguing that it could lose its exploration rights if it did not begin drilling operations by the end of 2017 under its contract with Russian state oil company Rosneft.
The Obama administration did not act on the application, but Exxon Mobil hoped that the Trump administration would take a favorable view.
The company released a brief statement Friday that explained its waiver request.
“Our 2015 application for a license under the provisions outlined in the US sanctions was made to enable our company to meet its contractual obligations under a joint venture agreement in Russia,” the statement said.