The fading threat of new Trump oil sanctions
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Secretary of State Marco Rubio was all over TV on Sunday with a consistent message: Don't expect new U.S energy sanctions against Russia anytime soon, but never say never.
Why it matters: Fresh penalties could raise oil prices while putting new pressure on Russia's massive fossil fuel export revenue.
- President Trump has threatened stiff tariffs on buyers of Russian oil and gas, but that appears more remote after his meeting with Vladimir Putin on Friday.
- China, the largest importer of Russian barrels, would face the most jeopardy under so-called secondary sanctions.
The intrigue: The exception is India, another large buyer. Secondary tariffs, announced earlier this month amid wider trade frictions, are slated to begin Aug. 27.
- White House trade adviser Peter Navarro on Monday put fresh pressure on India to stop purchasing Russian barrels.
Driving the news: Rubio told all the major networks that new sanctions to penalize Russia won't help bring peace in Ukraine.
- "The minute you levy additional sanctions, strong additional sanctions, the talking stops," he told ABC's "This Week."
- "And at that point, the war just continues. You've probably just added six, eight, nine, 12 more months to the war, if not longer. More people dead, more people killed, more people maimed, more families destroyed."
Yes, but: He said in the Sunday show interviews that new sanctions may ultimately arrive if peace talks fail.
What they're saying: "Would Trump return to sanctions and tariffs (or at least a mention of them) if the process appears to be stalling? We would not rule it out," ClearView Energy Partners said in a note.
- "[B]ut we still think broad secondary measures seem unlikely, and that Trump might be more inclined to direct new Russia sanctions at 'shadow fleet' tankers and/or LNG exports."
Catch up quick: Trump himself seemed to discount the possibility in an interview with Fox News' Sean Hannity after meeting with Putin.
- "Well, because of what happened today, I think I don't have to think about that now. I may have to think about it in two weeks or three weeks or something, but we don't have to think about that right now," he said.
Friction point: Over 80 senators support Sen. Lindsey Graham (R-S.C.) and Richard Blumenthal's (D-Conn.) bill that would hit Russian energy buyers with giant new tariffs.
- Graham, in a Fox News interview yesterday, praised Trump's meeting and argued the planned penalties on India "rattled" Putin and brought him to Alaska.
- But he urged wider attempts to curb Russia's huge fossil fuel export revenues.
"My advice to President Trump and Marco [Rubio] is that you've got to convince Putin that if this war doesn't end justly and honorably, with Ukraine making concessions also, we're going to destroy the Russian economy," Graham said.
- He called on Europe to put new tariffs on India and threaten new ones against China over Russian energy imports.
What's next: It's all fluid, so we'll see what comes out of today's White House meeting with Ukrainian President Volodymyr Zelensky and European leaders.
