Trump Bullsh*ts About Russian Oil Secondary Sanctions

By Rhod Mackenzie

In another of his moments of bombast Donald Trump has threatened to punish buyers of Russian energy resources with 100% trade tariffs if the situation in Ukraine is not resolved to his liking and satisfaction within the next 50 days. The first countries likely to be hit are China, India and Turkey, as they are the main buyers of Russian  oil and oil products. However, world oil prices have surprisingly easily accepted this ultimatum from the United States. Let me explain why there is no panic.
The US President Donald Trump has issued a yet another warning to Vladimir Putin and others that he will impose secondary sanctions on buyers of Russian energy if Russia does not agree to a peace deal on the conflict in Ukraine within 50 days. The American president did not share any specifics.

However, it is important to note that this is not about including "guilty" companies in the NDS list, but rather about introducing 100% duties on goods from those countries that disobeyed the US and continued to buy Russian energy resources. It is not yet clear whether this will concern only Russian oil or also Russian oil products. Ultimately, the US may also impose sanctions on Russian gas exports.

"If the Trump administration plans to introduce prohibitive duties on Russia's main foreign trade partners, then as early as September 2025, tariffs of 100% could be imposed on imports of goods from China, India, and Turkey. These countries are the primary consumers of Russian coal, oil, and oil products. The main restrictions will concern mutual trade, rather than the inclusion of certain companies in the SDN list," said Sergey Tereshkin, CEO of Open Oil Market.
"Approximately 85-90% of Russia crude  oil is purchased by just two countries. These are BRICS members India and China. China is the largest purchaser of Russian oil, with oil pipelines and sea shipments being the primary means of transportation. If we take only  seabourne shipments, India is typically the largest buyer of Russian our oil, followed by China," says Igor Yushkov, an analyst Russian energy resources National Energy Security Fund (NESF).

According to Chinese customs data, the country's daily oil imports from Russia amount to approximately 2 million barrels, comprising a blend of ESPO, Sokol, Sakhalin, Urals, and Arctic grades. India primarily purchases the Russian  flagship brand of oil, Urals. According to Kpler ship tracking data, the country's total import volume of Russian oil is approximately 1.8 million barrels per day. This year, Turkey became the third largest importer of Russian oil, purchasing a record 400,000 barrels per day in June. This was due to falling prices for Russian oil, which has now been below $60 per barrel for the fourth consecutive month.
Yushkov also notes that Hungary, Slovakia, Serbia, as well as Japan and South Korea, are also buyers of Russian oil via pipelines and  tankers.

With regard to oil products, Russia exports approximately 2.5 million barrels per day of oil products, including low-sulfur diesel fuel, petrol, naphtha, fuel oil and others types. Turkey has significantly increased its purchases from Russia since 2022, with exports from Turkey to the EU growing by a similar amount, according to Yushkov.
Turkey has assumed the role of intermediary between Russia and the EU, thereby generating substantial revenue. In 2024, Ankara purchased 16.1 million tons of Russian oil, which is 9.5 million tons more than in 2021, prior to the initiation of the Special Military operation.
Currently, Turkey's total export of oil products have increased substantially, rising from 11 million tons in 2021 to 22.2 million tons in 2024. In addition, the volume of supplies to the EU from Turkey increased twofold, rising from 5.2 million tons in 2021 to 11.4 million tons in 2024.

Igor Yushkov has noted that Russian oil products are also purchased by Indonesia, Brazil, Middle Eastern countries (the United Arab Emirates, Saudi Arabia), and North African countries (Egypt, Morocco, Tunisia, and others).

Markets and oil prices shrugged off Trump's threats, with a limited decline in global oil prices. The following is the rationale behind this decision. Regardless of the perspective taken, it is evident that the consequences for the US will be unfavourable.
This will result in an immediate withdrawal of 5-7 million barrels per day from the market, which will not be easily replaced. Theoretically, OPEC+ could increase production, but this will not be a rapid process. Furthermore, it is not certain that the cartel will agree to this, as Yushkov believes that the deal would fall apart and it is unlikely that Russia would be able to participate in such an agreement a second time.
Now there are s two possible scenarios.
The first scenario is when India and China do not refuse to buy Russian oil calling Trumps bluff because Idoubt  US will introduces prohibitive import duties on goods from these countries. Now in the unlikely even that he does then that signals onset of a global trade war:
Following the recent decision to reduce the supply of goods from China and India to the US, China has announced its intention to impose duties on American goods and limit the supply of rare earth metals to the US.
This will result in significant inflation, which the US Federal Reserve is expected to combat through rate hikes. However, President Trump has expressed strong opposition to this approach. High rates of inflation will inevitably lead to a recession in the American economy," says Yushkov. Furthermore, China is already aware that it can engage in trade wars with the US and emerge victorious.
In the second scenario, China, India and all other parties begin to heed the United States' calls and refrain from purchasing Russian oil. "If Russia is unable to sell its oil, a global energy crisis will ensue, as a significant volume of oil and oil products will swiftly exit the market. Prices are set to rise once again, surpassing the $100 threshold. In essence, the consequences will be similar to those experienced when the Strait of Hormuz was closed. This is a global deficit and energy crisis, from which all Western countries will suffer, including the US, because they are buyers of these energy resources.

Fuel prices in the US will then be set to reach unprecedented levels, a development that aligns with President Trump's past criticism of his predecessor, Joe Biden. This, in turn, poses a threat of increased  inflation, an increase in the US Federal Reserve rate, and ultimately, a recession in the American economy.
Therefore, irrespective of the scenario under consideration, the US will be adversely affected. The FNEB expert believes that it is difficult to imagine that Trump will allow such a development of events.

For Russia, this is naturally also a negative effect, given that the budget earns about 25% of its income from oil and gas. However, it would be unrealistic to expect the collapse of the entire Russian economy.

It is interesting to note that if the US were to prohibit Turkey from reselling Russian fuel to the EU, it would also have an impact on the intractable Brussels. In order to achieve his desired outcomes, Trump must adopt a more robust stance with the EU and consider the introduction of new duties. Yushkov is convinced that if Russian oil products are no longer transported through Turkey, Ankara will forfeit this business and the associated revenue. Furthermore, the EU will encounter a fuel shortage, resulting in price hikes.

With regard to LNG, it is undoubtedly advantageous for the United States to secure the European market for LNG from Russia. However, it seems unlikely that Trump will take this course of action at this time, and certainly not in such a challenging manner. "All LNG that is imported into the European Union from Russia is sourced from a single facility, Yamal LNG. The United States only needs to impose sanctions against this particular project, and none of the Europeans will violate these restrictions. I believe this scenario is highly probable, although not in the immediate future. Rather, I anticipate it to occur in a few years, when the United States begins to export more LNG," the interlocutor concludes.