LONDON: US President Donald Trump has unexpectedly shortened his deadline for imposing severe sanctions on Russian oil exports, raising concerns over potential global market disruptions.
Speaking alongside British Prime Minister Keir Starmer in Scotland, Trump stated he would give Moscow only 10 to 12 days to reach a deal to end the Ukraine war before enforcing secondary sanctions—a sharp reduction from his earlier 50-day timeframe.
The proposed sanctions would impose 100% tariffs on buyers of Russian oil, primarily affecting major importers like India and China.
Given Russia’s significant role in global oil supply—exporting 4.68 million barrels per day (bpd) of crude and 2.5 million bpd of refined products in June—the move could trigger price volatility.
Market reactions have been mixed. While investors initially dismissed Trump’s earlier threats, oil prices rose nearly 3% on Monday following his latest statement.
Analysts remain divided on whether he will follow through, given the risk of higher inflation in the US.
India, the largest importer of Russian seaborne crude at 1.5 million bpd, may be pressured to seek alternative energy sources amid ongoing trade talks with Washington.
China, however, is less likely to shift its buying patterns, already facing multiple US tariffs and viewing its ties with Moscow as strategic.
The effectiveness of secondary sanctions remains uncertain. If enforced, they could squeeze Kremlin finances, particularly if India reduces purchases, forcing Russia to sell oil at lower prices to China.
Meanwhile, OPEC+ nations, led by Saudi Arabia, hold spare capacity that could mitigate sudden supply shocks—though market stability is far from guaranteed.
Russia’s potential retaliation adds another layer of uncertainty. Oil and gas revenues contribute 30-50% of the federal budget, making any Western sanctions a direct threat to Moscow’s finances.
Recent disruptions at Russia’s Black Sea ports suggest the Kremlin is prepared to take countermeasures if pressured.
Trump’s unpredictable policy shifts have left markets wary.
Whether his latest threat materialises or not, the shortened timeline has heightened tensions in an already fragile oil market. - Reuters
