Trump Ally's Russian Gas Deal Tests Sanctions Reality

While Washington maintains tough sanctions on Russian energy companies, a Trump ally is quietly cutting deals with Novatek, Russia's second-largest natural gas producer. The partnership centers on Alaska—America's energy frontier that's geographically closer to Asia than the lower 48 states.

This isn't just another business deal. It's a test case for how sanctions work in practice, and whether political relationships can override economic restrictions.

The Players and Their Calculus

The Trump-connected businessman sees opportunity where others see sanctions. Novatek, led by CEO Leonid Mikhelson (himself under personal sanctions), controls about 17% of Russia's gas production. Despite restrictions, the company has maintained operations and even expanded in some markets.

Alaska produces roughly 1.5% of U.S. natural gas, but its location matters more than volume. Ships from Alaska can reach Asian markets in 10-12 days, compared to 25-30 days from the Gulf Coast. That geographic advantage could be worth billions in a partnership.

The timing isn't coincidental. With Trump back in office promising to end the Ukraine war "in 24 hours," sanctions relief seems more plausible than it did under Biden.

Winners, Losers, and Gray Zones

The winners are obvious.Novatek gets potential access to U.S. technology and Asian markets through an American gateway. The Trump ally gains Russian capital and expertise for what could become a $10+ billion project.

Traditional U.S. energy companies face new competition from a state-backed Russian giant. Ukraine and NATO allies see mixed signals about American resolve on sanctions.

But there's a bigger winner: the global LNG market itself. More supply routes and partnerships, even controversial ones, can stabilize prices and reduce supply chain risks.

The Sanctions Maze

Here's where it gets complex. Current sanctions target Novatek's access to Western technology and financing, but they don't prohibit all business relationships. A joint venture structured through American subsidiaries might technically comply with existing rules.

The Treasury Department has carved out exceptions for energy projects deemed in U.S. national interest. Alaska development could qualify, especially if it enhances American energy security or counters Chinese influence in the region.

But legal compliance and political acceptability are different things. Congress has repeatedly strengthened Russia sanctions, and any perceived weakening faces bipartisan opposition.

Energy Geopolitics in Play

The U.S. produces over 1 trillion cubic meters of natural gas annually—more than any other country. So why partner with a sanctioned Russian company?

The answer lies in Asia's appetite for LNG. China, Japan, and South Korea import over 200 million tons of LNG annually. Russia supplies about 15% of that market, while the U.S. provides roughly 12%.

An Alaska-Russia partnership could reshape those numbers. It might also create leverage over Moscow—economic interdependence can be a tool of influence, not just vulnerability.

The Bigger Question

This deal represents something larger than one business arrangement. It's about whether economic integration can coexist with political confrontation, and whether sanctions can achieve their goals when business incentives point in the opposite direction.

European companies have faced similar dilemmas. Some cut Russian ties completely; others found workarounds. The results have been mixed—Russia's economy has adapted more than many expected, while European energy costs have soared.