ECONOMY
Recent US-Russia Talks in Riyadh Yield ‘Minor Diplomatic Victory’ for the Kremlin
March 31, 2025
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Andrei Sizov
Head of the research agency SovEcon -
Tatiana Rybakova
Journalist and writer
In an interview with Tatyana Rybakova and Andrei Sizov, an agriculture market expert, explains the essence of the agreements recently reached between Washington and Moscow and discusses their relevance for Russian agricultural exports.
The original interview in Russian was published in Republic and is being republished here with their permission.
In a White House press release following the bilateral technical-level talks between the US and Russia on March 23-25 in Riyadh, it was announced that the sides had agreed to “ensure safe navigation in the Black Sea” and for the US to “help restore Russia’s access to the world market for agricultural and fertilizer exports, lower maritime insurance costs and enhance access to ports and payment systems for such transactions.” In addition, there was a commitment to implement measures that would enforce the agreement between Trump and Putin to prevent attacks on energy infrastructure in Russia and Ukraine.
Subsequently, the Kremlin issued its own press release, which included additional conditions: the agreements would only take effect once sanctions were lifted on Russian Agricultural Bank (Rosselkhozbank) and other financial institutions that facilitate food and fertilizer exports (including those connected to SWIFT). It also stipulated that sanctions on exporters of these products and insurers for their shipment must be removed. Moreover, vessels transporting food and fertilizers must no longer face restrictions and the supply of agricultural machinery and other goods essential for food and fertilizer production to Russia must be fully restored.
First of all, why is there such concern over lifting sanctions on the export of agricultural products, fertilizers and the import of agricultural machinery? Are there significant problems related to this?
While there are no major problems, there are certainly some challenges, but they are not directly related to Washington. These are not problems that President Trump or his administration can resolve, most likely.
Are you referring to connecting Russian Agricultural Bank to SWIFT?
No, there are a number of issues. The export of agricultural products has simply become more expensive and slower, as many banks are reluctant to engage with exporters. This is a case of “overcompliance,” where banks avoid dealing with certain transactions to prevent inadvertently processing payments linked to sanctioned individuals. The problem with bank compliance did not begin with the war – it has been growing for years, but naturally it became much more pronounced since the conflict started.
How much is this impacting exports?
The truth is, Russian food and fertilizer exports are at record levels. For instance, 44 million tons of fertilizers were exported in 2024, versus 38 million tons in 2021, prior to the war. Grain exports reached 71 million tons in the 2023/24 season, up from 42 million tons in the 2021/22 season. So the problems are technical, not fundamental.
In a White House press release following the bilateral technical-level talks between the US and Russia on March 23-25 in Riyadh, it was announced that the sides had agreed to “ensure safe navigation in the Black Sea” and for the US to “help restore Russia’s access to the world market for agricultural and fertilizer exports, lower maritime insurance costs and enhance access to ports and payment systems for such transactions.” In addition, there was a commitment to implement measures that would enforce the agreement between Trump and Putin to prevent attacks on energy infrastructure in Russia and Ukraine.
Subsequently, the Kremlin issued its own press release, which included additional conditions: the agreements would only take effect once sanctions were lifted on Russian Agricultural Bank (Rosselkhozbank) and other financial institutions that facilitate food and fertilizer exports (including those connected to SWIFT). It also stipulated that sanctions on exporters of these products and insurers for their shipment must be removed. Moreover, vessels transporting food and fertilizers must no longer face restrictions and the supply of agricultural machinery and other goods essential for food and fertilizer production to Russia must be fully restored.
First of all, why is there such concern over lifting sanctions on the export of agricultural products, fertilizers and the import of agricultural machinery? Are there significant problems related to this?
While there are no major problems, there are certainly some challenges, but they are not directly related to Washington. These are not problems that President Trump or his administration can resolve, most likely.
Are you referring to connecting Russian Agricultural Bank to SWIFT?
No, there are a number of issues. The export of agricultural products has simply become more expensive and slower, as many banks are reluctant to engage with exporters. This is a case of “overcompliance,” where banks avoid dealing with certain transactions to prevent inadvertently processing payments linked to sanctioned individuals. The problem with bank compliance did not begin with the war – it has been growing for years, but naturally it became much more pronounced since the conflict started.
How much is this impacting exports?
The truth is, Russian food and fertilizer exports are at record levels. For instance, 44 million tons of fertilizers were exported in 2024, versus 38 million tons in 2021, prior to the war. Grain exports reached 71 million tons in the 2023/24 season, up from 42 million tons in the 2021/22 season. So the problems are technical, not fundamental.
“If there were insurmountable problems, we would not be seeing record exports. Sure, it’s more expensive and slower, but the export flow continues. Even when certain routes close, new ones emerge.”
The signing ceremony of the Black Sea grain initiative. Istanbul, July 2022. Source: Wiki Commons
Then why demand that Russian Agricultural Bank be reconnected to SWIFT?
From the Kremlin’s perspective, this is likely an attempt to make Russian Agricultural Bank a protected financial institution for payments related to agricultural products and fertilizers, similar to how Gazprombank was used for energy transactions until recently. Notably, the Kremlin also mentioned “other financial institutions,” which was absent from the previous “grain deal.”
As for agricultural machinery imports, when I say there are problems, they also have little to do with the US administration. The issue is that many manufacturers exited Russia after the war began and it’s unclear how Trump can compel them to return. Furthermore, Russia has never been a major market for them. While agricultural machinery imports continue, they are now routed through third countries, which makes the process slower and more expensive. The bigger issue for Russian farmers and agricultural businesses is the duty on imported foreign machinery that was imposed by the Russian government, not Trump.
Yes, which now amounts to 80%.
Moreover, this is not the first time prices for agricultural machinery have gone up. They have risen significantly in Russia. In this context, the announcement by agricultural machinery manufacturers of their exit from the market is not so critical. Furthermore, as I mentioned earlier, everything can still be obtained through third countries, including used equipment and spare parts.
Then why do you think Russia set such terms for a Black Sea ceasefire?
These are essentially the same conditions that were put forth during the “grain deal” in 2022-23 (see Russia.Post about the "grain deal" here). The key change seems to be the removal of the demand to restore the Togliatti-Odesa ammonia pipeline, as well as the inclusion of additional financial institutions alongside Russian Agricultural Bank. Also, they added that the US must remove sanctions on food and fertilizer exports. But that remains vague – officially, there are no such sanctions from the US. You can say the fact that the White House took account of these demands is a minor diplomatic victory for the Kremlin.
The Russian side has consistently raised concerns about the export of grain and fertilizers, perhaps hoping to gain more support from the so-called “Global South.” The narrative that the “bad West” is preventing Russia from feeding the “Global South.”
From the Kremlin’s perspective, this is likely an attempt to make Russian Agricultural Bank a protected financial institution for payments related to agricultural products and fertilizers, similar to how Gazprombank was used for energy transactions until recently. Notably, the Kremlin also mentioned “other financial institutions,” which was absent from the previous “grain deal.”
As for agricultural machinery imports, when I say there are problems, they also have little to do with the US administration. The issue is that many manufacturers exited Russia after the war began and it’s unclear how Trump can compel them to return. Furthermore, Russia has never been a major market for them. While agricultural machinery imports continue, they are now routed through third countries, which makes the process slower and more expensive. The bigger issue for Russian farmers and agricultural businesses is the duty on imported foreign machinery that was imposed by the Russian government, not Trump.
Yes, which now amounts to 80%.
Moreover, this is not the first time prices for agricultural machinery have gone up. They have risen significantly in Russia. In this context, the announcement by agricultural machinery manufacturers of their exit from the market is not so critical. Furthermore, as I mentioned earlier, everything can still be obtained through third countries, including used equipment and spare parts.
Then why do you think Russia set such terms for a Black Sea ceasefire?
These are essentially the same conditions that were put forth during the “grain deal” in 2022-23 (see Russia.Post about the "grain deal" here). The key change seems to be the removal of the demand to restore the Togliatti-Odesa ammonia pipeline, as well as the inclusion of additional financial institutions alongside Russian Agricultural Bank. Also, they added that the US must remove sanctions on food and fertilizer exports. But that remains vague – officially, there are no such sanctions from the US. You can say the fact that the White House took account of these demands is a minor diplomatic victory for the Kremlin.
The Russian side has consistently raised concerns about the export of grain and fertilizers, perhaps hoping to gain more support from the so-called “Global South.” The narrative that the “bad West” is preventing Russia from feeding the “Global South.”
“In my view, the White House simply played along with the Kremlin, which has consistently used this narrative.”
Odesa, Ukraine's key Black Sea port, is a hub for grain exports. In late July 2023, Russia targeted Ukrainian grain facilities and port infrastructure with multiple missiles and drones. Source: Wiki Commons
While this is mostly rhetorical, since Russian exports are actually not so restricted, this is still a minor diplomatic victory for the Kremlin – it can say: “they took account of our demands.”
On the topic of SWIFT, it’s clear that only the EU can decide on connecting or disconnecting banks, as the company’s headquarters is in Belgium. Given the tense relations between Europe and the US at the moment, Trump might have a hard time persuading them. But technically speaking, how hard is it to make payments through Russian Agricultural Bank?
Of course, payments can be made without SWIFT; it’s just a messaging network between banks, like a telegraph – convenient but not the only game in town. By the way, the US press release uses vague wording, which is likely intentional. It states that the US “will help restore” Russian food and fertilizer exports. So they will call on other governments to lift some sanctions, but they are not guaranteeing that Russian Agricultural Bank or anyone else will be reconnected to SWIFT. Thus, any claims about Washington making significant concessions to Moscow or lifting many sanctions in the near term seem premature, in my view.
To wrap up, what is the Kremlin’s real aim with these demands? As you point out, the sanctions they want lifted are not causing major issues. So why push for these conditions? Is it simply a tactic to justify rejecting a ceasefire or is this an example of the idea of “aim high and you will at least hit something?”
I believe it’s the latter. If we look at the real situation in the Black Sea, there have been no fundamental issues with navigation for either Russian or Ukrainian ships since mid-2023.
On the topic of SWIFT, it’s clear that only the EU can decide on connecting or disconnecting banks, as the company’s headquarters is in Belgium. Given the tense relations between Europe and the US at the moment, Trump might have a hard time persuading them. But technically speaking, how hard is it to make payments through Russian Agricultural Bank?
Of course, payments can be made without SWIFT; it’s just a messaging network between banks, like a telegraph – convenient but not the only game in town. By the way, the US press release uses vague wording, which is likely intentional. It states that the US “will help restore” Russian food and fertilizer exports. So they will call on other governments to lift some sanctions, but they are not guaranteeing that Russian Agricultural Bank or anyone else will be reconnected to SWIFT. Thus, any claims about Washington making significant concessions to Moscow or lifting many sanctions in the near term seem premature, in my view.
To wrap up, what is the Kremlin’s real aim with these demands? As you point out, the sanctions they want lifted are not causing major issues. So why push for these conditions? Is it simply a tactic to justify rejecting a ceasefire or is this an example of the idea of “aim high and you will at least hit something?”
I believe it’s the latter. If we look at the real situation in the Black Sea, there have been no fundamental issues with navigation for either Russian or Ukrainian ships since mid-2023.
“The ceasefire that is being proposed has basically already been in effect for over a year and a half.”
Yes, there are occasional missile strikes near Odesa or even at the Odesa port and sometimes ships get damaged, but, as we closely monitor the situation there, I can say that this is likely collateral damage.
In other words, they decided to agree on a ceasefire that is already in effect and at the same time, Russia decided to ask for something extra?
Basically, yes, it seems like that. Plus, perhaps Trump is trying to position himself as a peacemaker, as according to Putin’s press secretary, Dmitri Peskov, it was Trump’s initiative to discuss a Black Sea ceasefire.
So they decided to give him the respect he seeks and simultaneously put forward some long-standing demands, hoping that something might come of that. And something did come of it, you could say, because Trump mentioned that some sanctions might be lifted. So, again, this looks like a minor diplomatic victory for the Kremlin at this point, with limited practical consequences for the global food and fertilizer trade.
In other words, they decided to agree on a ceasefire that is already in effect and at the same time, Russia decided to ask for something extra?
Basically, yes, it seems like that. Plus, perhaps Trump is trying to position himself as a peacemaker, as according to Putin’s press secretary, Dmitri Peskov, it was Trump’s initiative to discuss a Black Sea ceasefire.
So they decided to give him the respect he seeks and simultaneously put forward some long-standing demands, hoping that something might come of that. And something did come of it, you could say, because Trump mentioned that some sanctions might be lifted. So, again, this looks like a minor diplomatic victory for the Kremlin at this point, with limited practical consequences for the global food and fertilizer trade.
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