The Secondary Sanctions Squeeze
U.S. President Donald Trump is now largely following his predecessors hostile policy towards Russia.
If the war in Ukraine continues on its current path Russia will end it with an outright victory. The U.S. and its European vassals are trying to impose a ceasefire to prevent that. It would give time to rebuild the Ukrainian army and to restart the war at a more convenient time. But Russia won’t budge until its war aims are met.
A hoped for countermeasure is to pressure Russia’s oil customers, to thereby decrease its income and prevent it from finishing the war in its favor.
When the war started in 2022 the European Union cut its own access to Russian oil and gas supplies. It started to buy more oil from Gulf countries and other producers. India and China were thus suddenly cut of from their traditional suppliers. They started to buy Russian oil. Then U.S. President Joe Biden encouraged that. He did not want global gas prices to rise. Global supplies continued on an unchanged level and the change in the routes of oil around the globe had only a minor effect on prices.
One side-effect though was noticeable in some European refineries. Several of them were specialized in processing heavy Ural oil. They eventually had to go idle. Their business were picked up by Indian refineries which processed Russian oil and exported the resulting diesel fuel to Europe.
But now the U.S., and its European vassals, are trying to impose sanctions and/or tariffs on China and India for their continued buying of Russian oil. This would disturb the new market balance and eventually lead to higher oil prices for everyone.
China has successfully rejected U.S. pressure. In response to tariff threads it withheld minerals the U.S. needs. Trump had to pull back.
India is Trump’s new target:
Donald J. Trump @realD
Article from LewRockwell
LewRockwell.com is a libertarian website that publishes articles, essays, and blog posts advocating for minimal government, free markets, and individual liberty. The site was founded by Lew Rockwell, an American libertarian political commentator, activist, and former congressional staffer. The website often features content that is critical of mainstream politics, state intervention, and foreign policy, among other topics. It is a platform frequently used to disseminate Austrian economics, a school of economic thought that is popular among some libertarians.
