Investors reacted skeptically to statements about the possible introduction of secondary tariffs by the U.S. on buyers of Russian oil. As noted by Reuters commentator Hugo Dixon, the markets did not believe in the seriousness of the White House’s intentions, which was reflected in the rise of the ruble and stocks in Russia, as well as the decline in oil prices.
This is reported by Finway
Diplomatic Levers Instead of Radical Measures
Dixon is convinced that the Donald Trump administration has more effective tools at its disposal to limit the Kremlin’s revenues than the introduction of secondary sanctions. In his opinion, the U.S. can use diplomacy to influence key importers of Russian oil, particularly India and Turkey. By persuading India to abandon purchases of Russian oil and encouraging Saudi Arabia to increase production, Washington could avoid a sharp rise in global energy prices.
“Trump does not need secondary tariffs to reduce Moscow’s revenues, which currently amount to about $160 billion a year,” Dixon writes.
Price Caps and the Fight Against the “Shadow Fleet”
The European Union has already lowered the maximum purchase price for Russian oil to $47.6 per barrel. According to Dixon, if India and Turkey stop their purchases, the actual price could drop to as low as $40 per barrel. Additionally, Dixon proposes implementing strict sanctions against all vessels that are part of the so-called “shadow fleet” of Russia. This would enhance control over compliance with price caps and reduce the Kremlin’s budget revenues.
At the same time, the commentator emphasizes that the depletion of Russia’s budget may be insufficient due to Putin’s rigid stance. He underscores that the strengthening of military support for Ukraine by the U.S. and the use of frozen Russian assets by European countries could play a decisive role.