“Economic pressure on Russia is changing the balance of power in Europe.”, — write: www.unian.ua
Economic pressure on Russia is changing the balance of power in Europe.
Trump first expanded US sanctions against Russian oil and gas / photo ua.depositphotos.comUS President Donald Trump’s latest U-turn on the war in Ukraine was quick, “even by his standards.” As the British newspaper “Financial Times” recalled, only last week Trump began promoting a summit with Vladimir Putin to discuss a truce in the war. But he quickly canceled it and for the first time during his second presidential term strengthened US sanctions against the Russian Federation.
The authors write that Trump took a step that was always avoided by the administration of his predecessor Joe Biden: he imposed sanctions against the largest Russian oil companies Rosneft and Lukoil.
“Combined with further EU restrictions on Russian energy, this is a powerful blow to Moscow’s military economy,” the journalists explained.
The Trump administration, like the previous one, feared that sanctions against Russian oil exporters could cause “pernicious price increases,” the article explained. However, “recent declines in global prices and hopes that Gulf producers, encouraged by Trump, will be willing to increase output appear to have given the White House confidence to act.”
According to the publication, four of Russia’s largest oil companies, which account for about four-fifths of its oil exports, have already been blacklisted in the US. In addition to Rosneft and Lukoil, Gazprom Nafta and Surgutneftegaz were targeted in the last days of the Biden administration.
“These measures will reduce revenues in the sector, which provides about a third of Russia’s state budget. The extent of the reduction will depend in part on the response of Russia’s biggest oil consumers, China and India, as well as on the effectiveness of sanctions against Russia’s attempts to avoid them by using the network of shell companies, shadow tankers and insurance companies it has created to circumvent oil price caps imposed in 2022,” – the article says.
The authors noted that the threat of losing access to the dollar-based financial system through any ties to US-sanctioned entities is a powerful deterrent
On Thursday, the EU also imposed additional energy sanctions, tightening the ban on Rosneft and Gazprom Nafta operations and banning imports of Russian liquefied natural gas until January 2027. It also targeted another 117 tankers from Russia’s shadow fleet.
“It is unfortunate that the Belgian opposition has delayed the EU’s approval of a separate initiative — a €140 billion loan for “reparations” secured by frozen Russian assets — which would deal a double blow to Moscow. EU leaders must find a way to do this by December, otherwise increasing sanctions will be pointless,” the FT added.
The authors also explained that the new economic measures “will not change Putin’s calculations overnight.” After all, in their opinion, the Russian dictator is ready “to cause deep damage to the economic prospects of his country by continuing the war, which he considers crucial for the security of his country and his own legacy.”
“However, critics mistakenly condemn the sanctions as ineffective, as they have not yet been able to destroy the Russian economy or stop the war. Their cumulative and harmful impact is beginning to manifest itself in the stagnation of Russian growth, persistent inflation and the deterioration of the financial situation. In a grueling war, any step that throws sand into the gears of the adversary’s military machine is worthy of attention,” the authors of the article added.
They recalled that Putin was convinced for a long time that his forces “will always be able to outlast Ukrainian forces.” But if the EU is able to fulfill its commitment to replace US funding, and the Trump White House sticks firmly to the new sanctions, then “Moscow’s costs will be much higher.”
More about the impact of sanctions on the Russian FederationIt will be recalled that experts assessed the impact of sanctions on Putin’s military goals. They call them significant, but do not draw an unequivocal conclusion about the impact of sanctions.
At the same time, these sanctions can significantly change the balance of power on the continent. Some experts say that such steps by the US will help Europeans get rid of dependence on Russia forever. It is possible that some companies will start selling shares and Russian assets, not having the opportunity to earn from oil supplies to the EU.
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