Trump is not worried about new sanctions against Russia, but in vain

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to the Oil and Capital newspaper on the expected impact on Russian oil exports of possible secondary U.S. duties against buyers of Russian oil and the ability of the United States to increase its own oil production.

Alexey Belogoryev explained that the main problem is that the possible duties are directed not so much against Russia as against China, India, and Turkey. And restrictive measures are being introduced against the background of trade wars and attempts by the United States to conclude trade agreements with the same countries. So far, the logic of Trump's tariffs has been based on U.S. bilateral relations with any of the countries. In this case, the duties are tied to the relationship of China, India or Turkey with a third party.

"This is a dangerous precedent. Here you can go far and infringe on the sovereignty of the country, threatening duties on any occasion. Whether countries will accept such a challenge is an open question. China is likely to defy US pressure, especially since Washington has already shown this spring that it is not ready for high tariffs and the suspension of supplies of critical goods.

It's more complicated with Turkey and India. These countries are sensitive to sanctions. But here the choice is not in terms of relations with Russia, but in terms of succumbing and creating a dangerous precedent, which is initiated by Trump. I do not rule out that India will also struggle. Part of the oil trade will go into the "gray zone". China will generally continue to buy Russian hydrocarbons in almost the same volumes," the expert believes.

"But to compensate for the disappearance of Russian oil by increasing production in the United States is already more difficult. The price of oil on the world market should be $90 and above, then a real increase in oil production will begin in the United States in 4-5 months. However, this is true if we are talking about a volume of about 400-500 thousand b/s. If 2-3 million bpd of Russian oil falls out of the world market, the United States will not be able to compensate for this in any way. Only all the countries of the Persian Gulf can cope with this, and only if they agree to such an initiative, ignoring market prices," the director of research at the Institute for Energy and Finance said.

But there is a flip side to the coin. Almost half of the price of gasoline at gas stations in the United States is formed from the current cost of oil on the world market. So the increase in the cost of black gold, which risks occurring due to Trump's duties, is an increase in the price of gasoline at American gas stations. It is unlikely that the current head of the White House will want to repeat the mistake of his predecessor, burying his rating among the American electorate.