Three years after the US launched a price cap strategy to curb Russia’s oil revenue without destabilizing global markets, President Donald Trump is moving to ratchet up the pressure. On Wednesday, he announced a 25% tariff on Indian imports in retaliation for New Delhi’s continued purchases of Russian crude — and warned China, the largest buyer, could be next. The goal: squeeze Moscow’s finances ahead of a possible Trump-Putin summit, the Wall Street Journal reported.
The limits of the Biden-era price cap
When global oil topped $120 a barrel, the Biden administration encouraged countries like India to keep buying Russian crude, but at a steep discount. That policy helped buyers but did little to dent Russia’s war economy. Now, with Brent crude at $67, Trump sees room to be more aggressive without risking a global price spike. Oil and oil-product exports still bring Moscow more than $500 million a day, funding troop recruitment, weapons production, and battlefield operations.
Could sanctions change Putin’s calculus?
Some analysts say sustained restrictions on Russian oil could rattle Putin’s inner circle if revenues dry up. But others doubt it will shift his war aims, warning that halving Russian exports could send global oil above $100 a barrel. Putin, they argue, believes his “pain endurance” is higher than the West’s and expects Washington and its allies to relent first.
Wider sanctions in play
The European Union has tightened its own oil price cap and moved against Russia’s “shadow fleet” of tankers. Experts say Trump’s secondary sanctions could also slow Russia–China trade, at least until Beijing finds workarounds. Together, India and China now buy 85% of Russia’s seaborne crude, with India refining and re-exporting large volumes to Europe.
Political risks with India and China
India initially signalled a willingness to scale back purchases but has bristled at Trump’s public demands, turning the issue into a domestic political flashpoint for Prime Minister Narendra Modi. New Delhi has also accused Washington and Europe of double standards, noting US uranium imports from Russia and European LNG purchases. China, meanwhile, views Moscow as a strategic partner against Washington, making compliance with US pressure unlikely.
The potential impact on Russia’s war effort
Ukraine has been hitting Russian refineries and fuel depots, aiming to force production cuts. Some analysts warn that shutting wells could permanently damage Russia’s capacity; others say the industry can recover, citing its post-pandemic rebound. Russia’s National Wealth Fund has already lost most of its liquid assets, and its budget deficit is growing. Still, many expect Putin to cut social spending rather than defence if money runs short.
What’s next for Trump’s strategy
Former US officials say success would require more than tariffs on oil buyers — including sanctions on Russian and Chinese banks, a lower G7 price cap, and tougher action against Russia’s tanker fleet. But with relations with India at their lowest in decades and China unlikely to cooperate, Trump faces a high-stakes test of whether economic pressure alone can bring Putin to the negotiating table.
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