Trump's plan to stop Russian oils could increase prices
Trump's plan to stop Russian oils could increase prices
President Donald Trump tries again to end the war in the Ukraine . This time he is not aimed at Russia himself, but on the countries that buy Russian oil.
China and India in focus
At the top of this list China and India , two of the most important economies in the world. Trump announced that the United States could impose economic punishments to these countries if Russia does not agree to a peace agreement within 50 days.
global effects of the sanctions
The consequences of these sanctions could be far -reaching, not only for the two large markets in Asia, but also for the entire global economy. India and China would be forced to look for alternative oil sources to avoid high US tariffs or other sanctions. In 2022, Russia generated around $ 192 billion through the sale of oil, according to the International Energy Agency. A possible stop of these oil sales could not only hit Russia, but also drive up oil prices worldwide if the more than 7 million barrels of oil that exports Russia every day suddenly disappear from the market.
reactions to Trump's threat
So far, the oil markets have hardly responded to Trump's threat, mainly due to uncertainties about whether Trump will actually implement his announcements. China was also unimpressed on Tuesday. A spokesman for the Chinese Ministry of Foreign Affairs said that "compulsion" would not end any conflict. So far, India has not commented on the threatened measures. It remains to be seen which steps are actually taken.the "hammer" law
As part of the response to the Russian invasion of Ukraine, the United States, the United Kingdom and the European Union import bans and Price upper limit introduced for Russian oil. However, Russia quickly redirected its exports and is now increasingly selling to buyers in Asia, especially in China and India, buying the oils at reduced prices.
Trump's plan for secondary
Trump announced that the United States will raise “secondary tariffs” to countries that buy Russian oil. A US official said that they were sanctions against the countries that acquire the oil from Russia. This form of sanctions could have a significant impact on the Russian economy and push both India and China to rethink the purchase of Russian oil.
effects on the international markets
However, such a strategy could also have undesirable consequences. Russia makes up 36% of the oil imports of India and almost a fifth of China's imports. An immediate stop of the Russian oil imports without a clear replacement offer could lead to a dramatic increase in oil prices, which could possibly also fall back to Trump's own energy policy.
symbolic threats?
The threatened measures seem to pursue two goals: Russia signal that it may be cut off by income and to exert pressure on its trading partner. However, experts are skeptical whether and how far Trump is actually willing to put his threats into practice because he himself has an interest in maintaining trade relationships with these large economies.
While Trump threatens to do tariffs, these measures may have more symbolic character than can actually be implemented. In the geopolitical discussion, however, the signal that is sent with it also counts.
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